Canaccord upgrades Rightmove after resilience to OnTheMarket launch

27th Feb 2015 10:24

Canaccord Genuity has upgraded its rating on real estate portal Rightmove from 'hold' to 'buy' after a better-than-expected set of annual results on Friday.The broker has hiked its target price for the shares from 2,600p to 3,034p and said it still sees 13% potential upside to this new forecast.Rightmove said sales rose 19% to £167m in 2014, while operating profits jumped 20% to £124.6m."These results have exceeded our forecasts, which were at the top end of market estimates. We expect consensus to rise 5% to 10%," Canaccord said.The broker believes Rightmove's resilience to the recent launch of new competitor OnTheMarket "has proven Rightmove's business model" with membership numbers well above its forecasts."Advertisers have mostly decided to stay with the relatively expensive number one portal," the broker said.It said that OnTheMarket's arrival has actually "benefitted" the company, "as it has weakened the potency of the second largest portal and Rightmove's biggest competitor, Zoopla".The stock was up nearly 10% at 2,934p by 11:33.