JP Morgan sees persisting headwinds, underperformance for European internet

Kahoot ASA

09/02/2022 13:04

** JP Morgan flags headwinds are likely to remain for
European internet, noting the sector has underperformed
materially in 2022 over fears of rising interest rates combined
with negative effects from re-opening
    ** "Stock picking in this environment has become more
complex with volatility in tech valuations whilst M&A
expectations are increasing," it says, questioning whether
investors should buy back into growth considering potential peak
in inflation
    ** Despite de-rating of many tech names, the broker says
rising yields should make the sector a market performer at best
    ** The broker's favorite subsector is online classifieds
where "space is highly profitable and cash generative"
    ** It ups Kahoot!  KAHOT.OL  to "overweight" from "neutral",
citing changes to consumer behavior post COVID-19 and escalating
paid subscriptions
    ** JPM however turns more cautious on Auction Technology
Group  ATG.L  and JCDecaux  JCDX.PA , cuts both to "neutral"
from "overweight" 
    ** It also cuts Rightmove  RMV.L  to "underweight" from
"neutral", predicting limited share price outperformance

 (Reporting by Dina Kartit)
 ((Dina.kartit@thomsonreuters.com))