LONDON: Barclays on Monday downgraded forecasts for two UK-listed companies, blaming an “expect[ed] period of recession and uncertainty in the UK.” Analyst Andrew Ross and his team took the red pen to online estate agent Rightmove and price comparison website Money-Supermarket.com.
The investment bank says it likes both companies’ business models and believes they will win out in the long run. But both are too intertwined with the fabric of the UK economy to avoid taking a hit from the dip in its economy that the bank expects to see as a result of Brexit.
On Rightmove, the analysts said: “We remain structurally positive on Rightmove. But last week’s referendum changes the story near-term. Our economists now expect a period of recession and uncertainty in the UK, which is likely to mean reductions in house prices and transaction volumes. Rightmove does not have a one-for-one link to these two factors. But there will be an impact if new home developments are mothballed, estate agency branches start to close and price increases for property portals become difficult.”
On MoneySupermarket.com, they said: “We have been positive on Moneysupermarket since initiating last year. But the layers of uncertainty in the story have been building in the last nine months, most notably from elevated competition.”
Credits ET Realty