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BUZZ-Morningstar sees potential AI impact on Australia's REA Group

Reuters
Mar 06
BUZZ-Morningstar sees potential AI impact on Australia's REA Group

** Morningstar changes uncertainty rating to 'high' from 'medium' for property portal REA Group REA.AX, cuts fair value by 8% to A$126 per share

** Investment research firm says AI could erode co's pricing power if it becomes primary means of consumers searching for new home

** Highlights lower software development costs with AI use, lower replication costs amid high competition

** "If AI shortlists properties efficiently, aggregates features, and serves as a virtual buyer agent, the shift in users away from REA Group can drastically lower the value of traditional listings" - Morningstar

** 14 analysts rated 'buy' on average with median price target of A$218.90, as per LSEG-compiled data

** YTD, shares down 9.1%, last closed up at A$165.90

(Reporting by Nichiket Sunil in Bengaluru)

((Nichiket.Sunil@thomsonreuters.com))

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