JPM sees European Internet space at critical point

Kahoot ASA

09/12/2021 10:38

Dec 9 (Reuters) -    ** JPM views the state of the European
internet space as critical when looking at 2022, as 2021 was
marked with underperformance
    ** It points out the underperformance accelerated in the
second half of the year, driven by markets re-opening from the
COVID-19 pandemic, rising investment levels, and concerns around
rising rates
    ** Given structural headwinds the sector should continue to
deliver strong fundamentals, JPM says, adding however it might
"face continued equity multiple pressure if rates move higher
making it – at best – a market performer for our strategists in
2022"
    ** Given the "difficult" backdrop, the broker prefers names
with individual catalysts, low multiples for mid-term growth
profiles, good profitability and scope for M&A
    ** It upgrades Scout24  G24n.DE  to "overweight" from
"neutral," citing better than expected growth guidance, and
names the stock among its top picks along Delivery Hero
 DHER.DE , Just Eat Takeaway  TKWY.AS , Auction Technology Group
 ATG.L  and Adevinta  ADEV.OL 
    ** In the same note, JPM cuts German online used car seller
Auto1  AG1G.DE , Norwegian learning platform Kahoot! and
Oslo-listed media group Schibsted from "overweight" to "neutral"
    ** Following the sector-wide de rating, the broker slashes
TP on Auto1 by 46% to EUR 28; on Kahoot! it flags continued
pressure from high multiples and cuts TP to NOK 49 from NOK 87 
    ** The broker sees no meaningful upside for Schibsted at the
current valuation, sets TP at NOK 438, down 20.5% from earlier
view

 (Reporting by Agnieszka Gosciak, Ina Kreutz)
 ((agnieszka.gosciak@thomsonreuters.com,
ina.kreutz@thomsonreuters.com))