Is Realogy overleveraged?

Miami /
Oct.October 15, 2012 04:30 PM

Shares jumped 22 percent in Realogy’s much anticipated IPO last week, but they “look overpriced,” according to a Barrons report cited by Reuters. Realogy — the largest residential brokerage franchisor in the world and Corcoran Group, Century 21 and Citi Habitats parent — priced its initial public offering at $27 per share Wednesday, to raise $1.08 billion through 40 million shares.

But $27 per share seemed overleveraged to Barrons, because “the company is valued at $4.4 billion and carries $4.5 billion in debt.”

“Put a still-generous multiple of 11 on next year’s projected cash flow and Realogy’s stock is valued at around $27,” said Barrons. “That’s 20 percent below current levels.”

The Parsippany, N.J.-based firm, which is headed by chairman and CEO Richard Smith, is be listed under the ticker symbol RLGY. [Reuters]Christopher Cameron


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