Will Zillow And Trulia Unleash 'Godzulia?' Analysts Weigh In

Prospects for Trulia TRLA being acquired by Zillow Z are believable but talks, if any, might fall apart, analysts said Friday.

Zillow could pay $2 billion for Trulia's 36.92 million shares outstanding, and an agreement may be unveiled next week, according to a report Thursday from Bloomberg news service, which cited unnamed sources.

"Neither company has denied it," Deutsche Bank's Lloyd Walmsley said in a note Friday. Further raising Walmsley's suspicion, "Neither company has announced an earnings date. A year ago we had earnings dates for the second quarter by July 16."

Related Link: Trulia Up 30%; Zillow Rumored Near Making $2 Billion Bid

Zillow might pay $54 to $66 per share for Trulia, if a deal gets struck according to Walmsley, who headlined his note "Godzulia?"

But Walmsley warned that even if talks are underway, they could be derailed by Zillow founders' Rich Barton and Lloyd Frink super-voting shares, personality conflicts valuation conflicts, regulatory hurdles, backlash from real estate agents "and more."

Given the strong recent growth of both companies, "we were surprised at the timing," J.P. Morgan's Ronald Josey said in a note Friday.

Josey was "originally dubious on any deal," but now sees it as more likely. "We see it as Zillow playing offense," Josey said in a note maintaining an Outperform rating and $150 target on Zillow

Zillow traded recently at $155.12, up 6.4 percent; Trulia was trading at $55.45, up 3.1 percent.

date
ticker
name
Price Target
Upside/Downside
Recommendation
Firm
Posted In: Analyst ColorNewsRumorsAnalyst RatingsMoversDeutsche BankJ.P. MorganLloyd WalmsleyRonald Josey
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...