With the Rightmove PLC (LON:RMV) now adjacent to its 5,000p share price, Liberum Capital Markets has downgraded the property listings web site operator to 'hold'.
“There is now very little upside to our £50 target price and, in our view, no catalysts such as M&A [mergers & acquisitions] that justify increasing the TP,” the broker explained.
Shares in Rightmove were up 3p at 4,963p this morning.
Liberum is still a fan of the company, saying it has an excellent and dominant position in the market but the company is probably reluctant to drive its average revenue per agent (ARPA) up too quickly for fear of attracting regulatory attention.
“We see a bid for Rightmove – as happened with ZPG [Zoopla] - as unlikely. Margins at c. 75%-76% offer little scope for cost-cutting and we do not see bids from other classified groups,” Liberum said.
The target price equates to the offer being made by Silver Lake and reflects the fact that Liberum expects the bid to be approved and that no counter-bids will emerge.
Zoopla currently trades at 488.8p, up 0.6p.