Rightmove: Dominant U.K. Property Portal Upgraded To Buy With 10% IRR

(Preview) Rating Change (RMV LN) (Neutral to Buy)

Summary

• Rightmove shares have corrected 10% since September, providing an attractive entry point for one of the best listed businesses.

• Rightmove's financials have recovered from the negative impact of COVID-19, and it remains the dominant U.K. property portal.

• Customer count and average revenue have resumed growing in the core Agency segment, but performance is not yet at a cyclical high.

• With its network effect and whole-of-market view, Rightmove has continued to innovate its core offering and to expand into new lines.

• With shares at 670.1p, we forecast a total return of 37% (10.5% annualized) by 2024 year-end, in just over 3 years. Buy.

Introduction

We are upgrading our rating on Rightmove plc from Neutral to Buy.

Rightmove is the #1 property portal in the U.K., with a market capitalization of £5.7bn ($7.8bn). We have followed Rightmove for years with good results:

• Our first Buy rating generated a 30% gain during March-November 2019

• Our second Buy rating generated a 41% gain during March-Aug…