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High level backing for 'creative' uSwitch portal deal

Investors’ Chronicle, the Financial Times group magazine for private investors, says Zoopla’s acquisition of price comparison site uSwitch is ‘a creative response’ to the loss of agent members it suffered following the creation of OnTheMarket.

“We were already of the view that, despite the early churn and dent in this year's forecasts, Agents Mutual posed only a limited existential threat to the property listings group” according to an editorial in this week’s publication. 

“The decision to buy uSwitch helps move the narrative on further. It was also roundly welcomed by the market, which cheered the shares up to Numis's 215p target price on the day of the announcement. That's 26 times the broker's forward earnings forecasts - a decent discount to Rightmove, which seems fair. Hold” it advises.

Investors’ Chronicle then cites two assessments by analysts. 

Peel Hunt describes the acquisition as “a bold corporate finance move” which shows “logic to the one stop shop approach of combining the businesses.” It advises investors to Hold.

Numis Securities advises investors to Buy. It says: “The deal should increase earnings by 20 per cent in the first full year of ownership, and is a good fit with Zoopla's existing business as it will allow consumers to "research, find and manage their home". The company's trading update was reassuringly in line with expectations, with healthy fee growth and - more importantly - no further shocks or surprises on customer numbers.” 


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