JPM prefers profitable, cash-generating cos in European online space

Kahoot ASA

27/05/2022 07:58

** JPMorgan says the focus of investors in the European
internet space is on the companies' ability to be profitable and
generate cash rather than burn it
    ** The broker prefers value vs growth, as it revisits its
coverage "post the reset", following the reversal of all share
price gains achieved during the pandemic
    ** Online classifieds - "our favourite subsector" - is
highly profitable and cash generative, says JPM, naming Scout24
 G24n.DE  and Adevinta  ADEA.OL  (both "overweight") as key
picks
    ** In food delivery, the broker says high leverage and
consumer driven earnings risk put Delivery Hero  DHER.DE ,
Deliveroo  ROO.L  and Just Eat Takeaway  TKWY.AS  on the
sidelines
    ** It cuts Just Eat Takeaway and Deliveroo to "neutral" from
"overweight", and ups Auto Trader  AUTOA.L  and RMW  RMV.L  to
"neutral" from "underweight"; keeps "neutral" on Delivery Hero
    ** The broker notes cuts in clients' advertising budgets put
pressure on ad firms' revenue streams
    ** It downgrades Stroeer  SAXG.DE  to "neutral" from
"overweight" and JCDecaux  JCDX.PA  to "underweight" from
"neutral"
    ** JPM's other top picks are ATG  ATG.L  and Kahoot!
 KAHOT.OL  (both "overweight")
    ** It also cuts Auto1  AG1G.DE  and Schibsted  SCHA.OL  to
"underweight" from "neutral", saying they are names to avoid
along with JCDecaux


 (Reporting by Elena Vardon)
 ((elena.vardon@tr.com))