Rightmove leadership position priced in, says Deutsche Bank
Deutsche Bank downgraded its recommendation on Rightmove to 'hold' from 'buy' on Tuesday as the stock nears its new price target of 530p, down from 550p.
DB said Rightmove is the clear market leader in the UK online classified property vertical.
"With 76% share of time spent on the top four property classifieds and three/six times more monthly visits than No.2 /No.3 player, the Rightmove portal is a 'must have' for estate and letting agents to reach the widest possible audience of UK house hunters," it said.
However, the bank argued that the company's leadership position is now priced in.
DB still reckons Rightmove is well positioned to weather both competitive and cyclical pressures, thanks to its robust position providing premium products beyond basic listing, data insight tools and leads to agent clients. In addition, it said new product initiatives like the Rightmove Passport for tenants offer potential upside.
"However, as consensus partly caught up with our more bullish estimates, sentiment about exposure to the cycle is more muted and valuation appears more fair," it said, hence the downgrade.
At 1230 BST, the shares were down 1.8% at 538.50p.