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UBS launches coverage of UK estate agents

Wed, 13th Jul 2016 09:21

(ShareCast News) - UBS initiated coverage of the UK estate agent sector on Wednesday, with Foxtons and Savills at 'buy', Countrywide at 'neutral' and Purplebricks at 'sell'.The Swiss bank, which expects UK wide housing transactions to fall 6% this year and 5% the next - with a 10 drop in London in 2017 - said online-only agents are structurally altering the landscape of the sector, and are gaining significant market share as consumer awareness and willingness to consider using them grows.UBS said conventional agents most able to differentiate themselves such as Foxtons and Savills justify a premium price and will be most successful in withstanding the changes.As far as Foxtons is concerned, the bank said the UK referendum result has added significant uncertainty, in particular for the London housing market, and it has factored in a declining market in the second half of this year and 2017 within its forecasts.However, in the medium term, it sees organic growth potential at the company, driven by a rollout of five to seven new branches per year.On the other hand, it reckoned Countrywide was most at risk from this shift, with pressure on commissions over the last six years indicative of its limited ability to respond to online competition.Still, it said the recent share price weakness in Countrywide on the back of the Brexit vote means the risks are capture in the valuation, hence the 'neutral' rating.On Purplebricks, UBS said the valuation looks stretched given executive risks on growth."With the business not yet in profit and on EV/sales of 18x we see valuation risks. The model has been proven fit for growth, but the self-employed nature of franchisees, as well as the large revenue cut that Purplebricks takes from its franchisees, for us creates question marks around scalability. There are also significant costs associated with growing a web-based company."At 0930 BST, Foxtons shares were up 3.3% to 131.50p, Savills was up 1% to 655p, Countrywide was up 1% to 263p and Purplebricks was down 1.1% to 127.35p.

More News

11 Jan 2017 14:31

Almost 1,000 estate agents 'unlikely to still be trading' in three years

(ShareCast News) - As Foxtons revealed details of its troubled 2016 and warned of continued harder times in the year ahead, new analysis of the housing sector confirmed increasing levels of financial distress among UK estate agents. Nearly 1,000 estate agencies could be wiped out over the next three

16 Dec 2016 09:29

BROKER RATINGS SUMMARY: Shore Upgrades Downtrodden IG And CMC Markets

15 Dec 2016 16:42

Countrywide considering sale of commercial property business

(ShareCast News) - FTSE 250 estate agency group Countrywide confirmed on Thursday that it is undergoing a strategic review in relation to its commercial property arm, Lambert Smith Hampton. In a brief statement in response to earlier press speculation, Countrywide said it is considering a potential

25 Nov 2016 20:13

FTSE 250 movers: Paragon Group jumps, AMEC sinks

(ShareCast News) - Paragon Group led to the upside on the back of a positive endorsement from broker Jefferies. Analyst Phil Dobbin said: "Paragon is evolving from a securitized non-bank lender to a more diversified retail funded banking group. We believe that the company has the ability to gain mar

25 Nov 2016 10:37

WINNERS & LOSERS SUMMARY: AstraZeneca Up As Liberum Says Undervalued

24 Nov 2016 17:00

LONDON MARKET CLOSE: Stocks Drift To Mixed Finish With US On Holiday

24 Nov 2016 16:41

London close: UK stocks subdued on US Thanksgiving as resources in focus

(ShareCast News) - UK stocks were in cautious form all day Thursday, with global markets generally subdued as traders in the US put their feet up for a Thanksgiving break. The FTSE 100 closed up 0.17% to 6,829.20. The FTSE 250 ended the session down 0.18% to 17,590.62. On the blue-chip upside, seve

24 Nov 2016 12:00

LONDON MARKET MIDDAY: Countrywide Shares Sold Amid Quiet Market

24 Nov 2016 07:34

Countrywide tumbles to new low on Brexit profit warning

(ShareCast News) - Estate agent Countrywide warned that operating profits will be lower than expected for the full year, due to a "tough" residential market as a result of a change in stamp duty and the EU referendum. The FTSE 250 company said due to reduced transactions in the second half of the ye

23 Nov 2016 14:54

2nd UPDATE: Government Letting Fee Ban Will Drive Up Rents - Savills

23 Nov 2016 11:56

LONDON MARKET MIDDAY: Estate Agents Sold Ahead Of UK Autumn Statement

23 Nov 2016 09:24

Estate agents stung by Chancellor's ban on letting fees

(ShareCast News) - In his Autumn Statement, Chancellor Philip Hammond announced he planned to clamp down on letting agent fees, sending estate agents shares lower on Wednesday. Shares of companies in the sector were sharply lower in early trade, with Foxtons were down 9%, Countrywide losing 5% and L

11 Nov 2016 12:19

LONDON MARKET MIDDAY: Trump Rally Cools Ahead Of Risk-Off Weekend

25 Oct 2016 10:11

Broker tips: Howden Joinery Group, Segro, Countrywide

(ShareCast News) - Howden Joinery Group shares dropped on Tuesday as Berenberg lowered its recommendation on the stock to 'hold' from 'buy' and cut the target price to 450p from 550p. Berenberg said the supplier of kitchens and joinery products is seemingly one of the most exposed companies in its U

25 Oct 2016 10:10

Tuesday broker round-up

(ShareCast News) - Segro: Barclays keeps at overweight with a target price of 520p. Howden Joinery: Berenberg downgrades to hold, 450p target. Standard Chartered: Deutsche Bank reiterates sell with a 574p target. Cobham: UBS reiterates neutral with a 160p target. Cobham: Barclays reiterates equal

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