Goldman likes the brokerage business, upping Realogy (RLGY) to Buy saying worries about royalty rates and commission splits, broad housing concerns, and large stock sales are already priced into the stock. "We expect these issues to diminish over the coming quarters."
How to buy Realogy? Take the cash from a sale of Toll Bros. (TOL), says Goldman, removing its Buy rating on the homebuilder. Despite the downgrade, Goldman still likes Toll's position at the high end of the market and sees room for material margin expansion as the company works through its land-development progress.
TOL -2.4%, RLGY +0.4% premarket.