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Financial services giant Credit Suisse says Agents' Mutual's new portal will hit its target of 5,000 members by its January launch date but that funding for the project is insufficient - meaning that Rightmove and Zoopla are at attractive entry points to investors.

In recent weeks Credit Suisse discounted its target price for Rightmove from 3,100p to 2,655p and for Zoopla from 290p to 270p but it has now given both predicted 'outperform' ratings.

"We conclude that Agents' Mutual membership is growing, the risks are real and will impact Rightmove and Zoopla 2015 numbers, but that with the stocks down 13 per cent and 17 per cent respectively over the last month the risks are priced in," Credit Suisse said.

But the bank says it fears funding for Agents' Mutual - estimated to be £9.4m this year and £22m in 2015 - may be "insufficient" when compared with Rightmove's and Zoopla's anticipated annual spend of between £42m and £46m each.

The bank says that while sentiment may be negative towards Rightmove and Zoopla in the short term as Agents' Mutual membership continues to grow, this will improve over time.

"Around launch, newsflow [coverage] will likely shift as the [Agents' Mutual] venture actually has to deliver on the promises made to agents. We flag launch delays, poor site usage, weak early traffic and a lack of leads as potential issues" warns Credit Suisse.

Comments

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    Portal User... WRONG... In anticipation of OTM I have already removed 5 of my branches listings from Zoopla and was paying them 2,600 p/m. Between now and January there will be several thousand agents doing the same. You will be turned into a user of RMV and OTM

    • 22 October 2014 19:56 PM
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    Trader, self interest perhaps

    • 22 October 2014 13:20 PM
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    Credit Suisse said no such thing re:your headline.
    They simply said it would be difficult.

    • 22 October 2014 12:33 PM
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    '....new portal will hit its target of 5,000 members by its January launch date but that funding for the project is insufficient...'

    The above is correct only if one only takes 'funding' to be in purely cash terms. When RM was launched they provided agents with the means to include advertising RM on all of the participating agents internal and external advertising. That free advertising exposure was worth an absolute fortune to RM. If agents do the same for OTM it could be successful - to what degree will have to be seen - but it would give it a good chance.
    P.S. Those who are whining on about restricting agents to one other portal should look at other organizations and their conditions.
    (Sole Agency)

    • 22 October 2014 12:01 PM
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    Credit Suisse do not have a clue what they are talking about. Onthemarket will surprise most people. Rightmoves platform and offering has stalled - their share price has gone from 139p to 28 in less than 5 years. Rightmoves best days are behind them, they will soon start to lose market share as AM and OTM forces the industry to move away from the rightmove monopoly.

    This morning RM shares are around 20, and the share price will 100% retest the 52 week low of 19.35 and will break through this level, and the share will retest the 61% retracement level - this is what the share price graph is saying, which takes us to approximately 14.00. May take a year to get there, but this time next year, we will be here. Expect some big target misses for rightmove in the not too distant future.

    • 22 October 2014 09:59 AM
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    One thing is certain, its agent's money that will flow out to what ever portal.

    • 22 October 2014 09:05 AM
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    I think agents who join AM are looking at this the wrong way. OTM is not going to have the desired effect of weakening Zoopla or Rightmove. All it's going to do it turn me from a user of Z or RMV to a user of Z AND RMV, as that is what I will need to do to get 100% property coverage. The idea that I'm going to start going to OTM to view their severely-limited inventory is laughable.

    • 22 October 2014 08:57 AM
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