Rightmove: Strong Business, Undervalued Due To U.K. Macro Concerns
(Preview) Company Update (RMV LN) (Buy)
Summary
Rightmove shares have fallen 26% from their December 2021 peak, de-rating to a 28x P/E, likely due to concerns about U.K. macro.
It is one of the highest-quality listed businesses in the U.K., and earnings have quickly recovered from the disruption by lockdowns in 2020.
Rightmove remains dominant in U.K. residential property listings, and trends are positive in average revenue and customer numbers.
We believe EPS can grow at 10%+ sustainably, the stock's P/E should re-rate from 28x to 30x and, and the Dividend Yield is 1.3%.
With shares at 597.8p, we expect a total return of 65% (15.8% annualized) by 2025 year-end. Buy.
Introduction
We review our Rightmove PLC investment case ahead of H1 2022 results scheduled for July 29. Rightmove’s share price is currently 26% below its peak last December and 10% lower than a year ago.
We upgraded our rating on Rightmove to Buy in October 2021. Since then shares have lost 10% (after dividends). (Our Buy ratings during parts of 2019 and 2020 were mo…