Zoopla and Rightmove, the property websites, seem to be unmoved by the launch this week of rival site On The Market.
The estate-agents driven On The Market ruled that members using the site could only advertise on one or the other of Zoopla and Rightmove, but not both.
But the Financial Times has reported it has already had to warn members about the rule, and analysts at Liberum said:
This reinforces our view that On The Market may not prove the threat to property portal websites that has been suggested, with the established portals benefiting from scale of inventory.
Jefferies had already come to the conclusion On The Market may not be as disruptive as first thought:
In the main battle ground of London, we cannot see many properties for sale. A search by London borough reveals that at launch Zoopla and Rightmove, so far, do not have much to fear.
In our mind the much awaited launch has not lived up to the hype. We appreciate that more listings may follow in the days to come because despite having more than one year to prepare, some of On The Market’s customers were not ready for the big launch.
We perceived London to be the main battle ground for Zoopla, ahead of the launch the writing on the wall was rather bleak with most of the On The Market London based founders dropping Zoopla rather than Rightmove. However so far Zoopla has only seen a loss of 5.5% of properties for sale in London and around 2.6% across the UK. It is early days but today is turning out much better than we had anticipated for Zoopla.
Zoopla shares are currently 16.5p better at 186p while Rightmove is up 30p at £23.80.
Meanwhile Foxtons added 7.5p to 168.5p, despite saying the London property market was cooling, it did not forecast a pick up until after the general election, and it expected full year earnings to fall slightly from £49.6m to around £46m.
Canaccord Genuity said:
Foxtons has net cash (no debt) and even in difficult markets is cash generative. It has a policy of paying special dividends, whilst maintaining around £9m of surplus cash for working capital.
We maintain our 228p target price, based on a 17.3 times 2015 PE, which is an earnings yield of 5.7%.
With Foxtons shares yielding 5.9% (including special dividends) and with 38% potential upside to our target price, we maintain our investment recommendation as buy
