Rightmove PLC (LON:RMV) had its ‘sell’ sign removed by UBS as analysts think the shares “could perform well during the current period of macro uncertainty”.
This is because the “vast majority” of the online estate agency website’s 2020 revenues are “likely to be secured early in the year as current price negotiations are concluded”, the analysts said in a note to clients on Thursday.
There were two more reasons for the rating to be upgraded to ‘neutral’, with the price target lifted to 615p from 550p.
With Rightmove guiding for estate agent losses to continue during the first half in line with the 420 losses at the end of last year, UBS reckons these are “now priced in”, with shares de-rating 16% from their January peak.
Various reports have indicated that the UK property market trends have continued to improve since the general election, which the analysts think reduces the risk net agent losses will continue into the second half of 2020.
“Upside to Rightmove’s share price exists if we see stamp duty relief during the UK budget,” they added.
“Stamp duty changes are widely regarded to have impacted transaction volumes in London, where agency commissions are highest per house sold.”
There are also potential downside risks, as for many sectors and companies, if the UK is unable to secure a trade deal with the EU.