8 months ago
Rightmove still favoured pick in European classifieds as confidence grows: UBS
Investing.com -- UBS has reaffirmed Rightmove (OTC:RTMVY) as its preferred stock in the European classifieds sector, raising its 12-month price target by 18% to 944p from 803p, in a note dated Friday.
The upgrade follows a sector-wide re-rating rather than any change in the company’s earnings outlook.
Rightmove’s share price has climbed 13% over the past three months, which UBS attributes to both the broader sector uplift and growing investor confidence in the company’s consistent operational performance.
The brokerage that competitive pressures from OnTheMarket have had limited impact, and Rightmove’s financial stability has helped alleviate investor concerns around market cycles and competition.
UBS analysts highlight three core reasons behind their continued preference for Rightmove.
First, the company has delivered steady results throughout 2023–2024 despite market volatility and competitive challenges.
Second, its “bundled list all” subscription model provides a buffer against ARPR volatility. Third, the benefits from a shift among estate agents toward lettings, which offers more resilience during housing downturns.
The valuation is based on a revised 21.7x EV/EBITDA forward multiple—the peer group average, plus a 2.5% premium, resulting in a 22.2x target multiple. UBS estimates this justifies the new price target of 944p.
Forecasts for the company’s earnings remain unchanged, with Rightmove expected to post an EBITDA CAGR of 12% between 2025 and 2027, outpacing Auto Trader’s 7%.
The firm also offers a forecast free cash flow yield of 4.3% for FY26, compared to Auto Trader’s 4.5%.
Rightmove’s financials underscore its strong position. Revenues are projected to rise from £390 million in 2024 to £426 million in 2025, with EBIT growing from £274 million to £298 million.
Net earnings are expected to increase to £225 million in 2025, with diluted EPS rising to 29.65p. The EBITDA margin remains high, estimated at 71.7% in 2025, while the EBIT margin is forecast at 70%. The dividend per share is set to grow to 10.66p.
The company’s valuation metrics continue to reflect its robust profile. For 2025, Rightmove trades at a 26.4x P/E and a 19.6x EV/EBITDA multiple.
Its forecast return on equity is 287.2%, and it carries no meaningful net debt. UBS sees a total forecast stock return of 22.3%, with a 13.5% expected excess return over market assumptions.
In its short-term quantitative review, UBS rated Rightmove positively on industry outlook and earnings potential relative to consensus. No immediate catalysts were identified, but sentiment remains supportive of continued upside.
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