UBS Downgrades Rightmove to a “Sell”

On September 15 2008, it was reported by Reuters that UBS has downgraded it recommendation for Rightmove, the UK property portal, from a “neutral” to a “sell”.  UBS cut its target price for Rightmove from 310p to 270p.

In annoucing the downgrade, UBS said “The recent results were clearly strong, but Rightmove has a lag into the downturn and we expect it to lag into any upturn. Its fortunes are very much tied to any housing market recovery and with transactions likely to be lower in 2009.”

The impact of the announcement was immediate with the Rightmove share price dropping from a previous close of 304.5p to an intraday low of 283p before recovering slightly to 296.25p at close – down 2.7% on the day.

1. Are Things Bad for Rightmove?

   Three interesting pieces of information have come to light in the last couple of weeks concerning rightmove.co.uk. Firstly, rightmove.co.uk reported that it lost 1,300 agents in the first have of the year but offset this loss by signing up 800 new agents. Secondly, a survey conducted by Estate Agency Today said 75% of agents would not renew with rightmove.co.uk and would move to the free sites. Finally, an article in the Telegraph reveals that Rightmove is one of the top 10 shorted stocks with more than GBP 50m staked on the shares continuing to slide. The question is ... does this really mean that Rightmove is in trouble or will they ride through the storm and profitably remain in front? Read on for more ... ...

2. REA Group Considers Closing Propertyfinder

   In an announcement to the Australian stock market today, the REA Group said that it was commencing a review of their UK operations. The announcement also flagged a potential closure of all or part of the Propertyfinder business as well as the potential write down of its UAE and Hong Kong assets. They said that the likely net impact on their 2009 net profit is anticipated to be in the range of $26m to $28m. This announcement comes after the recent closure of the UK print operations and rumours circulating that the REA Group had unsuccessfully tried to sell the Propertyfinder business to DMGT and Rightmove. So what is the likely outcome?...

3. Rightmove Releasing Results This Week, What Will They Hold? (Updated)

   Rightmove is releasing its financial results on Friday this week and it is predicted that their numbers will be under pressure due to the poor performance of the UK property market and the rise of low cost / no cost competition. Read on to find out more ... ...

4. rightmove.co.uk Trial £95 Premium Listing

   A press release from rightmove.co.uk says the UK market leader will be launching a Beta version of its website on 8 June 2009. The Beta site is to trial sellers’ and agents’ response to a publicised suggested retail price of £95 for upgrading their property to its Premium Listing advert for a month....

5. Connells Sells 18% Stake in rightmove

   It was announced today that Connells has sold 18% or 21m shares in rightmove for 155 pence / share. This announcement comes a day after Connells extended a long standing marketing agreement with rightmove that sees it advertising on the site until 2012....