Swiss investment bank UBS has advised investors to sell their Purplebricks shares as the market share for the controversial agency appears to have fallen sharply.
The financial press is widely reporting that UBS cut its price target for the shares to 78p from 85p.
It’s been suggested that while Purplebricks recently talked up its activities, and revealed that it would launch a £7m campaign to boost instructions this summer, separate data seen by UBS shows Purplebricks losing market share to rival online operator Strike, previously known as Housesimple.
Purplebricks’ declining market share has a number of possible explanations, the bank says.
“For example, we are currently seeing strong house price growth in the UK, which may have led to more consumers choosing to use a traditional agency to help them maximise the selling price.
“Further, Strike may be winning some customers from Purplebricks.
“It is also possible Purplebricks may be holding back marketing spend ahead of the launch of its new pricing model.”
Purplebricks announces its full year results on July 6; ahead of that UBS is cutting its 2022 revenue forecasts for the firm in the belief that market share has dipped from 5.4 per cent to 5.2 per cent.
“While we remain confident that a new pricing model can improve Purplebricks’ market share, we are concerned that this may now be from a lower base” the bank told investors in a market note.
Here is our report from last month on Purplebricks' upcoming marketing blitz.