The dust has barely settled on the news that Rightmove is raising its fees to agents – and that key directors are to receive impressive bonus payments, both of which have riled their agency clients – and Rightmove is back in the spotlight.
This time the news isn’t so good for Rightmove, although it will barely feel the breeze, as UBS says it has downgraded the portal to ‘neutral’ from ‘buy’. The investment bank said that ‘the market was now ‘pricing in realistic assumptions’ about revenue growth.
Analysts said that upside potential for the FTSE 100 firm’s shares depended on growth in its “addressable revenues”, namely housing transactions returning to peak levels, accelerated house price inflation, and estate agents passing on some marketing costs to vendors like charging for featured listings on the site.
The bad news, say the analysts, that there is a risk that a slowdown in housing transactions could bring ‘material’ closures of estate agency branches (which, you may say, is already happening) it could lead to flat membership levels.
The bank also upped its target price to 500p from 490p, saying the current share price indicated the group would grow its average revenue per advertiser (ARPA) per month by an average of £97 per year over the next ten years.
Share price on Monday afternoon was 493.00p