Explaining the downgrade, analyst Ian Whittaker said: “It is a tricky call as management are taking the right steps and the company's net cash position gives it firepower to reshape its business.
Decline more structurally driven?
“However, numbers for 2019 are under pressure from rising print prices and, less so, slowness in events.”
“We also have concerns MailOnline’s decline in top-line growth is maybe more structurally, than cyclically, driven.”
With a price target of 685p, the stockbroker sees 5% downside to the current price of 725.5p.
Whittaker added: “MailOnline’s slowing growth has been blamed on cyclical factors but we think it is more structurally driven namely the shift in Online advertising to video, where it is less prominent.”