JPM names top picks, stocks to avoid in European internet space

Adevinta ASA

15/08/2022 09:56

** JPMorgan says that while the European internet space has
lost all pandemic-driven share price gains in the past nine
months and Q2 earnings triggered many downgrades, it believes
the H2 outlook is materially improving
    ** "With our strategists arguing the rebound in Growth names
is likely to have some further to go, perhaps even until year
end, we see continuous support for the sector," JPM says
    ** The broker adds it believes companies with high exposure
to rates and limited consumer exposure will outperform in H2
    ** For key picks in the sector, it names Norway's Adevinta
 ADEA.OL  and Kahoot!  KAHOT.OL , and Germany's Scout24
 G24n.DE , Delivery Hero  DHER.DE  (all "overweight") and Auto1
 AG1G.DE  (raised to "overweight" from "underweight")
    ** It points France's JCDecaux  JCDX.PA , Britain's
Deliveroo  ROO.L  (both "underweight") and Auto Trader  AUTOA.L 
(cut to "underweight" from "neutral") as key names to avoid
    ** JPM says the online classifieds space, including Scout24
and Adevinta, is highly profitable and cash generative with
reduced exposure to consumer
    ** It sees appealing valuation and M&A optionality in the
food delivery market, preferring Delivery Hero to Deliveroo and
Dutch-based Just Eat Takeaway  TKWY.AS  driven by its earnings
upside risk
    ** It adds recent weeks indicate further deterioration in
advertising trends, leading it to take more conservative
approach to JCDecaux

 (Reporting by Marta Serafinko)
 ((Marta.Serafinko@thomsonreuters.com; +48 58 769 66 00;))