What Happened?
Shares of real estate services firm Newmark (NASDAQ:NMRK) jumped 4% in the afternoon session after analysts at Citizens JMP initiated coverage on the stock with a "Market Outperform" rating, calling it their top pick in the real estate services sector.
The investment firm set a $17.00 price target, citing several factors for its optimistic outlook. Analysts expect Newmark to gain market share on its peers, driven by recent hiring of established producers with long-term contracts. They also noted the positive impact of resolving an ownership overhang and highlighted recent investments in Europe and Asia as potential new revenue streams in underpenetrated markets. Citizens JMP pointed out that Newmark trades at a significant discount to its sector average, suggesting room for growth, especially with an anticipated pickup in transaction-based revenues.
After the initial pop the shares cooled down to $12.73, up 3.3% from previous close.
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What Is The Market Telling Us
Newmark’s shares are quite volatile and have had 15 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 5 months ago when the stock gained 12.1% on the news that the company reported strong fourth quarter 2024 results that blew past analysts' revenue expectations, driven by its Investment Sales division. In addition, its EPS and EBITDA beat. On the other hand, its full-year EBITDA guidance missed. Still, this quarter had some key positives.
Newmark is up 1.5% since the beginning of the year, but at $12.73 per share, it is still trading 20.3% below its 52-week high of $15.98 from October 2024. Investors who bought $1,000 worth of Newmark’s shares 5 years ago would now be looking at an investment worth $3,166.
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