JP Morgan is keeping faith in the broader online classifieds sector, but its latest view is a mixed bag for UK names.
While the sector’s long-term outlook remains “bright,” the bank warns that share price gains have narrowed the margin for error, and selectivity is now essential.
For UK investors, the message is clear: be wary of the big incumbents.
JP Morgan has reiterated its least-preferred stance on Auto Trader Group PLC (LSE:AUTO) and Rightmove PLC (LSE:RMV), both rated “underweight.”
The view is that while these two names have been solid performers, their premium valuations now look stretched, especially as growth normalises and cost-cutting becomes a bigger focus for the sector.
Instead, the bank favours Auction Technology Group PLC (LSE:ATG), upgrading it to one of its top European picks.
ATG, a more niche UK-listed operator, stands out for its blend of earnings potential and efficiency improvements, traits JP Morgan believes will matter more as investors scrutinise margins as closely as top-line growth.
More broadly, the bank notes M&A could reshape the landscape from 2026 onwards, and flags growing interest in European assets.
For now, though, UK investors looking at this space might consider tilting away from the well-trodden favourites and towards emerging platforms that still offer valuation headroom and operational upside.