[From the Archives] Rightmove: Reassessing after CoStar Entry & Lindsell Train Speculation

With today’s news of a potential REA offer, we are republishing our assessment from November 2023 after the Costar/OnTheMarket transaction FREE

With today’s news that REA is considering an acquisition of Rightmove as a “transformational opportunity”, we are republishing our assessment of Rightmove after the Costar/OnTheMarket transaction from November 2023 FREE to all subscribers. Rightmove shares were at 473.6p then but have risen by nearly 25% to ~690p this morning, a gain of ~50% in a year. For us, Rightmove has been a mid-sized position in our “Select 15” model portfolio (update to come this week) and in real life; you can read our review of H1 results here.

Highlights

• CoStar wants to be #1 in the U.K. and will spend aggressively

• We believe “network effect” and “free” will protect Rightmove

• Nick Train comments point to Rightmove as a new position

• Shares at 19.3x 2022 EPS and have a 1.9% Dividend Yield

• We see 75% total return (19.9% p.a.) by end of 2026. Buy

Introduction

We reassess the situation at Rightmove after CoStar entered the U.K. market by agreeing to acquire OnTheMarket, and following speculation that Lindsell Train has …