City broker puts ‘sell’ rating on both Rightmove and Zoopla

| Rosalind Renshaw

The property portals battle took a new twist yesterday when broker and investment bank Panmure Gordon put “sell” ratings on both Rightmove and Zoopla.

Panmure Gordon said that OnTheMarket posed more of a threat than had been originally thought.

It said it could hurt the profits of Rightmove and Zoopla more than expected.

The broker put a price target of 1850p on Rightmove and 130p for Zoopla.

Rightmove’s share price moved down yesterday, while Zoopla’s moved up slightly.

In its note to investors, Panmure said OTM looked “flawed” but could be a “noisy neighbour” for some time, and could also adapt its business model.

The broker had previously rated Rightmove as a “buy” but only started coverage of Zoopla Property Group yesterday.

Panmure said its key concern for Zoopla was OTM’s “one other portal”.

Reuters, in reporting the ratings, said that the press had reported the rule “largely being ignored”.

Reuters also said that Zoopla’s shares had risen strongly this week, up by over 20% on Monday and Tuesday when the market took the view that the OTM launch was a “damp squib”.

Yesterday, Zoopla’s shares rose for a third day running, but only marginally by 1.8p to finish at 191.80p.

Rightmove’s share price tumbled almost 3% by 72p to finish at 2371p, losing much of its gains of the previous day. It is next due to report to shareholders on February 27.

 

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25 Comments

  1. mark_one
    January 29, 2015 at 07:19

    Who is buying Zoopla shares ?. I wonder…….

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  2. nextchapter
    January 29, 2015 at 07:39

    This 1 other portal rule and Onthemarket are such a joke! And Zoopla need to take some responsibility and look after the clients that have stayed loyal. I can't believe some Agents are advertising across all 3 platforms! Zoopla needs to say, you decided not to stay with us, we're removing you from our site!

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  3. angeli
    January 29, 2015 at 08:35

    More biased reporting! What about the other 12 analysts tracking. I know agents locally to me who sold shares last week based on press such as this and have lost money…this site is becoming a bit of a joke for being so one sided.

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    1. RealAgent
      January 29, 2015 at 08:43

      Oh ok so EYE is now responsible for share advice!?! How daft you are.

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    2. MF
      January 29, 2015 at 15:02

      Errr, if you don't like it here angeli, why do you come?

      Report
  4. NewsBoy
    January 29, 2015 at 09:00

    There must be plenty of sellers for both but who in their right mind would want to buy either. Greek banking shares look to be a safer option.

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  5. the message
    January 29, 2015 at 09:43

    I have to say I think this is the worst story PIE have ran. We all know they support OTM, thats great, and as an agent I want it to be successful, but as i have said before I do have some real doubts around execution of marketing and incentivisation for the OTM team. I also think we have done ourselves a disservice by not being able to phorensically challenge OTM more, for fear of being called out as a blackleg.

    Now i think all analysts reports are flawed, and would advise everyone to ignore them all. But to have a headline like this and a story like this, is awful.

    So I have got a copy of the report from an investor mate, quite a few things negative to OTM in it as well.

    First line…."its hard to see how OTM will be a serious competitor to RM or Z"….

    "like most observers, we struggle to see how OTM will be a long term problem for the incumbents given its clear shortfalls in the proposition to housebuyers house sellers or agents"

    and "in a UK market that remains supply rather than demand constrained, any evidence that agents are missing out on listings because they are not on OTM could push agents away from OTM very quickly"

    Now as I say, I wouldn't read any of these things, but PIE, come on, you are doing members a disservice here by being so one eyed

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    1. Paul H
      January 29, 2015 at 10:13

      "I have to say I think this is the worst story PIE have ran."…What on earth are you talking about?!Read it again, it appears to be full of facts to me, unless you think writing about facts is a bad thing?

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      1. the message
        January 29, 2015 at 10:38

        Paul. Maybe I overreacted, but a big headline about a city analyst report, come on….
        Anyway, would love you to answer the two biggest issues I have with OTM's plans.
        Marketing – big TV splash this weekend, but OTM don't have a strong enough product proposition yet for a full national campaign. My fear is this is a huge waste of money – we will drive lots of traffic, but most people will have a poor user experience, and wont come back. Its a hug leaky bucket. I am sure its good for the ego of the OTM marketing team, but strikes me as a great way to burn through lots of cash.
        Telegraph and Mail – feels totally the wrong audience for our members, and I am concerned its savilles and knight frank heavy
        Countrylife – we arent really advertsising in it are we?
        And salaries/packages for the team. Given we need to be hiring top class developers/SEO/digital marketing people, how are we getting them when we cant offer any sort of deals that usual start ups do? It must be on base pay and I find this really worrying as its not how start ups succeed.
        These are the quiestions OTM just ignores, and just focuses on tub thumping and flag waving, and why many of us cant yet make the leap.

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        1. Paul H
          January 29, 2015 at 10:50

          "Marketing – big TV splash this weekend, but OTM don't have a strong enough product proposition yet for a full national campaign."…Says who, check the ACTUAL available stock, not the SSTC & under offer stock being listed on RM & Z, as well as the stock that Z & RM are only just starting to take off from agents that have issued notice to leave. Here is a figure quoted on Twitter yesterday…."London Property uploaded to portals today (28th Jan) : Rightmove 833, OnTheMarket 642, Zoopla 593. They do have the stock and more importantly OTM WILL HAVE STOCK BEING EXCLUSIVELY LISTED WITH THEM AND NOT RM & Z and this will be incentive enough for people to use it….."My fear is this is a huge waste of money – we will drive lots of traffic, but most people will have a poor user experience, and wont come back"……I and many other agents are getting enquiries and more hits to our sites so clearly the user experience must be good enough for some people….

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          1. the message
            January 29, 2015 at 10:56

            Very interesting article in City Am today about where the battle is really to be won and lost, and it isnt one I have confidence that OTM will really be able to compete in. I certainly dont have the confidence that the OTM Board (average age of god knows what…) will be the people to lead the next digital revolution.
            But ultimately stats dont lie, and will the thrilling seeing the hitwise stats over the next few weeks (I assume you know what that is Paul) – As I have said, I fear you will have a big ramp up in numbers, and a quick tail off because we have pushed the mass market button too quickly.

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  6. marcH
    January 29, 2015 at 11:25

    Complaining about PIE writing this article is like spitting in the wind. PIE exists to inform and this kind of story is of interest to those who operate in our industry. As for those numpties who buy or sell shares based on what an article reports – good grief. If there is anyone to blame, blame the broker !!

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  7. Paul H
    January 29, 2015 at 11:27

    "Very interesting article in City Am today about where the battle is really to be won and lost, and it isnt one I have confidence that OTM will really be able to compete in."…Of course not as you are someone with a vested interest pretending to someone on the fence, don't tell me next you will be stating how the TV campaign is not working and your seeing more take on's by bot being OTM. We all understand THE MESSAGE you want to put across!

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    1. the message
      January 29, 2015 at 11:43

      oh grow up. trying to ask insightful questions is not someone hoping it fails. We are not yet in a world where we just have to agree with those who shout louder, nor do I expect to be reading pravda here. OTM has a long tough battle ahead and there re those of us who are concerned over their short term strategy and cash spend. But fine, I will stop asking any questions and just read the self contratulatory comments and backslapping from people who wouldnt know how to build a digital business if it slapped them in the face. Sadly Paul, its people like you that if OTM does fail are to blame, you stifle any kind of questioning or debate with your bully boy style. Good luck, if you are an agent then I really hope you are a competitor as you come across as someone I would love to run rings round, if you work for OTM then god help em, you really arent doing them any favours.
      Farewell cruel world, I disappear

      x

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      1. Paul H
        January 29, 2015 at 11:53

        Well if your going to ask questions how about asking proper questions instead of "why are they advertising on TV" and "why are they advertising in the press", if these are the type of question you want to ask then you've got no chance in business.

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        1. the message
          January 29, 2015 at 12:32

          I asked why advertise in the telegraph (v expensive, average age of user 60+), why advertise in tv on the first week before the product as good as it needs to be for a major launch
          How do they pay start up "experts" with no stock to do so – SEO people can cost a fortune
          How much control over marketing do the london based agents have
          are they advertising in country life
          how is springett compensated?
          They were my (rational) questions. Dont forget about 70% of readers of this havent been indoctrinated yet, and need some convincing. Your thick bully boy attitude doesnt help, especially if you are an AM guy getting paid a big salary

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          1. Robert May
            January 29, 2015 at 13:08

            Who do you think owns more property the aging readership of the Telegraph or the readership of the Red Tops.
            They are not advertising to reach home owners they are advertising to executors and solicitors too which publication do you think is more likely to be read by that audience? There is little point aiming adverts at those likely not to be moving for 7 + years, target adverts where instructions are likely to come from. A bit harsh but you did ask!

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          2. Robert May
            January 29, 2015 at 13:10

            should read 'just' to reach

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          3. the message
            January 29, 2015 at 13:53

            thanks for the reply Robert, and I like the fact you came back. The problem is you are thinking as an estate agent trying to win new business. OTM isnt an estate agent, it is a digital classified business that needs a huge audience of potential buyers. An ad in the telegraph targetting executors and solicitors is exactly what Knight Frank and Savills currently do, and not what RMV and Z do. Your answer shows exactly why I fear for OTM, its a site built for what they think the consumer wants, with marketing that thinks as an estate agent does. Total waste of money to drive consumer traffic. And basically the rest of us paying for savills

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          4. Robert May
            January 29, 2015 at 14:37

            Estate Agency is a service industry and the primary function of the property portals is to introduce agents to applicants, as such it is not there to drive what is promoted as consumer traffic, OTM is there to provide a negotiation tool to Agents who had become over reliant on their service providers.
            What will be promoted as cracks in the co-operation between AM agents is actually a natural evolution of OTM. Already, just 4 days after going live, OTM and its agents are already beginning to follow an expected pattern. I am not posting as an Agent I am posting as someone who understands and respects agents and who has a good (experienced) idea how this will all play out.

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          5. RealAgent
            January 29, 2015 at 14:49

            I think what you are missing "the message" is which demographic group our clients are in. Last year 72% of them were over the age of 40! subtract 19% for those under 50. So yes they are users of the internet but not JUST users of the internet so other publications like the telegraph still have value TODAY. I don't doubt that will change more over the coming years but OTM is absolutely right to aim there marketing at an older demographic right now.

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          6. the message
            January 29, 2015 at 15:37

            you are right, I stand corrected. And thats why rightmove have based their whole strategy on advertising in the telegraph and mail.
            You cant make it up, and some people just won't listen. GIve it a month and when OTM announce a "great new signing" of someone who knows a tiny bit about digital marketing, and the reality that they have p@&ssed up against the wall a marketing plan set by high end estate agents.

            x

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          7. Robert May
            January 29, 2015 at 16:43

            It would be a really interesting comparison exercise to take two copies of OTM, apply your Digital marketing domain knowledge to one and my Agency domain knowledge to the other. I have been on the end of digital marketing expertise and whilst I fully appreciate how digital marketing can work for a retail business have yet to see a service industry benefit in the same way.

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  8. angeli
    January 29, 2015 at 16:17

    Two research analysts have rated the stock with a sell rating, three have assigned a hold rating and six have given a buy rating to the company’s stock. Zoopla Property Group PLC presently has a consensus rating of “Hold” and an average price target of GBX 233.80 ($3.51).

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  9. Andrew Richardson
    January 29, 2015 at 16:51

    5th Jan Zoopla shares traded at 199p, then set new lows every day until 26th Jan, falling to a record low on that date of 150.8, a drop of 25% in 21 days. They were always going to recover but the crash was far greater than the rise over the last few days.

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