European internet sector "scans rather attractive relative" - JPM

AUTO1 SE

11/04/2025 12:32

** J.P.Morgan says European Internet sector "scans rather attractive relative" to other sectors, given its local focus making it less sensitive to U.S. tariffs, structural growth and cost-saving initiatives, as well as potential for increased M&A activity

** JPM says the sector's shares fell 6% since the beginning of April, a softer dip compared to MSCI Europe which fell 12%

** While incorporating modest, macro-driven downgrades of 3% for the whole sector, JPM says Auto1 AG1G.DE, Ocado OCDO.L and Scout24 G24n.DE constitute "three high-conviction stocks" (all "overweight") where it sees "robust earnings resilience and our estimates above consensus"

** JPM cuts German meal-kit company HelloFresh HFGG.DE to "neutral" from "overweight" saying its 60% revenue reliance on the U.S. market may lead investors to adopt a "wait-and-see approach" to the company's operational outlook

** It maintains "overweight" rating for Delivery Hero DHER.DE citing "several levers" for improved profitability after stake sale in Middle Eastern Talabat, on top of its attractive valuation

** JPM continues to be cautious about UK online real estate provider Rightmove RMV.L, keeping "underweight" rating, as it sees robust competition for the company's consumer/tech experience

** HelloFresh shares fall 7.49%, underperforming the German midcap index .MDAXI which is down 1.3%

 (Reporting by Maria Rugamer)

 ((maria.rugamer@thomsonreuters.com))