Property portal Rightmove attracts investor confidence as UBS forecasts 12% EBITDA growth through 2027
Key Takeaways
- UBS raises Rightmove price target 18% to 944p and reaffirms it as the preferred stock in European classifieds, driven by sector-wide re-rating and growing investor confidence.
- Rightmove shares climb 13% over three months as the company demonstrates resilience against competitive pressures from OnTheMarket and maintains stable revenue generation.
- EBITDA growth projected at 12% CAGR through 2027 outpacing Auto Trader’s 7%, with revenues expected to rise from £390 million in 2024 to £426 million in 2025.
Introduction
UBS has reinforced its confidence in Rightmove’s market position, raising the property portal’s 12-month price target by 18% to 944p from 803p. The upgrade reflects a sector-wide re-rating rather than fundamental changes to the company’s earnings outlook.
The investment bank maintains Rightmove as its top pick in the European classifieds sector, citing the company’s consistent operational performance and financial stability. This endorsement comes as digital property platforms face increasing competitive pressures and macroeconomic headwinds.
Key Developments
Rightmove’s share price has gained 13% over the past three months, driven by both sector momentum and investor confidence in the company’s resilience. UBS analysts highlight three primary factors supporting their preference for the stock.
The company has delivered steady results throughout 2023-2024 despite market volatility and competitive challenges from rivals including OnTheMarket. Its “bundled list all” subscription model provides protection against average revenue per partner volatility, stabilizing cash flows during market fluctuations.
Estate agents’ strategic shift toward lettings offers additional resilience during housing market downturns. This trend supports Rightmove’s revenue diversification beyond traditional property sales listings.
Market Impact
UBS bases its revised valuation on a 21.7x EV/EBITDA forward multiple, representing the peer group average plus a 2.5% premium. This methodology results in a 22.2x target multiple supporting the 944p price target.
The company trades at a 26.4x P/E ratio and 19.6x EV/EBITDA multiple for 2025, reflecting its premium market position. According to Investing.com, UBS projects a total forecast stock return of 22.3%, with a 13.5% expected excess return over market assumptions.
Rightmove offers a forecast free cash flow yield of 4.3% for FY26, marginally below Auto Trader’s 4.5% but supported by stronger growth prospects. The company maintains minimal net debt, strengthening its financial flexibility.
Strategic Insights
Rightmove continues investing in product-led growth, migrating clients to higher-value packages including Optimiser Edge and launching new tools to streamline property transactions. The company leverages its dominant market position, capturing over 80% of UK consumer time spent on property portals.
Strategic expansion into commercial property, mortgages, and rental services aims to diversify revenue streams beyond core residential listings. This network effect creates substantial barriers to entry for competitors seeking to challenge Rightmove’s market leadership.
The European classifieds sector experiences increased consolidation, with notable transactions including Costar Group’s acquisition of OnTheMarket. These dynamics reshape competitive landscapes and may influence future shareholder structures across the industry.
Expert Opinions and Data
UBS analysts project Rightmove’s EBITDA CAGR of 12% between 2025 and 2027, significantly outpacing Auto Trader’s 7% growth rate. Net earnings are anticipated to rise to £225 million in 2025, with diluted earnings per share climbing to 29.65p.
The company’s EBITDA margin is estimated at 71.7% in 2025, with an EBIT margin forecast at 70%, demonstrating exceptional operational efficiency. Dividend per share is projected to grow to 10.66p, supporting income-focused investors.
Rightmove’s latest multi-channel brand campaign increased impressions substantially, with social media engagement rising nearly threefold year-over-year. This performance indicates sustained consumer interest and effective marketing execution.
Conclusion
UBS’s reaffirmation of Rightmove as the preferred European classifieds investment underscores the company’s operational excellence and market resilience. The 18% price target increase reflects growing optimism about Rightmove’s ability to navigate market cycles more effectively than competitors.
While competitive threats from rivals have shown limited impact, the sector remains exposed to macroeconomic uncertainties and potential disruptive merger activity. Rightmove’s strong subscription model, high margins, and strategic diversification position it to maintain market leadership despite these challenges.
