Rightmove: Reassessing after CoStar Entry & Lindsell Train Speculation

Company Update (RMV LN) (Buy)

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 started building a stake in their third U.K. buy since 2020.

Rightmove’s share price fell 14.3% on the day (October 19) CoStar’s acquisition of OnTheMarket was announced, and has now fallen by a total of 17.7%, taking them to one of their lowest levels in the past 5 years:

Rightmove Share Price (Last 5 Years)

Source: Google Finance (09-Nov-23).

Lindsell Train appears to have started buying into Rightmove in September, before the CoStar-OnTheMarket deal was announced, based on comments made by co-founder Nick Train in several…