Rightmove PLC (LON:RMV) has been upgraded to ‘neutral’ from ‘underweight’ and had its target price lifted to 658p from 433p by JP Morgan as analysts at the US investment bank eyed a “strong transformation” in the online classifieds sector.
In a note to clients, JP Morgan said it was seeing a theme of “online classifieds 2.0” as industry players moved outside their established business models through dynamic pricing, better customer acquisition tools and new revenue streams.
“We push back on any concerns that growth is unsustainable and may slow meaningfully going forward”, the bank said, adding that mergers & acquisition activity in the space was also becoming for prevalent and presented “additional opportunities”.
One player analysts expected to see further moves from was private equity group Prosus, which last month narrowly lost a takeover battle with Dutch firm Takeway.com over delivery app Just Eat PLC (LON:JE.).
For Rightmove, JP Morgan said it had upgraded the stock on the back of a “potentially better” macroeconomic picture for the UK as well as what they said was “best in-class product development”.
Shares in Rightmove were 0.7% higher at 674.8p in mid-morning trading on Thursday.