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