Rightmove shares are set to rise to 600p because while estate agent numbers are dwindling, they are paying more to list.
The forecast comes from analysts at equity research firm Exane BNP Paribas.
It said that Rightmove’s results for the first half of this year, due on July 26, are likely to show strong ARPA (advertising rate per advertiser) progress, albeit offset by lower branch numbers.
Exane is predicting ‘healthy’ ARPA growth of 9%.
However, it adds that “weak agency membership trends and slowing online agent growth may weigh on sentiment”.
Exane also forecasts that 2020 will be “another year of tepid transaction momentum and Rightmove will likely pursue another price-led ARPA rise, with continued decline in agent membership”.
Exane has trimmed its previous revenue forecasts for Rightmove next year by 3%, predicting 7% growth instead of the previous 10% it had forecast.
It continues to forecast 8% revenue growth for this year, and 10% for 2021.
For this year, it is forecasting growth in ARPA to £1,092 per month per branch with a 2% drop in members; next year it is forecasting a figure of £1,180, with another 2% drop in membership; and in 2021, a figure of £1,276, with a 4% drop.
The analyst thinks that Rightmove’s profit margin will be 74% this year, 75% next and 76% in 2021.
Exane yesterday raised its share price target from 570p to 600p and reiterated its ‘outperform’ rating for Rightmove.
Exane said it remains convinced of the long-term structural growth potential of Rightmove.
Yesterday, Rightmove shares finished at 539p, giving it a market capitalisation of over £4.8bn.