Deutsche Bank reiterated its 'buy' ratings on Rightmove PLC (LSE:RMV),Auto Trader Group PLC (LSE:AUTO) and Baltic Classifieds Group PLC (LSE:BCG), but lowered its price targets ahead of a key week for the classifieds sector.
- The bank reduced its target price for Rightmove to 665p from 732p.
- It cut its target for Auto Trader to 850p from 1,040p.
- It trimmed its target for Baltic Classifieds to 278p from 287p.
Analyst Gareth Davies said the week was important for the sector, with Scout24 reporting on 26 February and Rightmove due to publish full-year results on 27 February.
He described the forthcoming Rightmove results as particularly significant after the group’s November trading update triggered a 16% share price fall.
Since that update, the shares had fallen a further 23% amid broader concerns about artificial intelligence disrupting online platforms.
Deutsche argued that the probability of a material earnings surprise in the 2025 results or in guidance for 2026 appeared relatively low.
At the November update, Rightmove provided explicit guidance for 2025 and set out parameters for 2026 to 2028.
Given the visible and subscription-based nature of the group’s revenues, the bank believed there was limited scope for a negative surprise on the headline numbers.
Deutsche positioned itself at the low end of management’s revenue growth expectations, modelling 8% growth.
It forecast a 2026 operating margin of 67%, consistent with guidance that incorporated the investment programme outlined in November.
An operating margin measures operating profit as a percentage of revenue and indicates how efficiently a company converts sales into profit before interest and tax.
On those assumptions, the bank forecast 3% operating profit growth for 2026, again at the low end of the 2026 to 2028 guidance range.
As a result, Deutsche said it expected the reported figures and 2026 guidance to be broadly in line with expectations.
It argued that management’s performance during the analyst presentation and its ability to address investor concerns would be of greater importance than the headline numbers.
The note framed the results as a test of confidence after a period of share price weakness rather than a catalyst for further earnings downgrades.