CoStar's entry could be disruptive for European property platforms, Jefferies says

Scout24 SE

19/03/2024 10:11

** Jefferies says the entry of U.S. CoStar  CSGP.O  to the
European property platform market could mark a disruptive moment
for incumbents, accelerating the race to build regional scale
amid a "fragmented and disparate" market
    ** "CoStar's European market entry with the acquisition of
OnTheMarket in Oct-23 marks the potentially most significant
introduction of outside capital into property platforms in the
region in a decade," the broker says
    ** After the UK, Jefferies expects CoStar's M&A focus to
shift to operators of regional scale
    ** The broker double-upgrades Sweden's Hemnet  HEM.ST  to
"buy" and increases PT by 157% to SEK 385, saying CoStar's
actions indirectly elevated Hemnet to "the sector strategic
asset" and seeing it vigorously pursuing secular catch-up in
take-rate
        ** "Hemnet deserves a larger valuation premium,"
Jefferies says; the stock is up around 5% by 1011 GMT, on top of
pan-European STOXX 600  .STOXX  index
  
    ** Jefferies keeps its "underperform" rating on UK's
Rightmove  RMV.L  as it sees the property portal facing the
highest risk to disruption from CoStar
    ** It maintains its "buy" rating on Norway's Schibsted
 SCHA.OL  saying that its simplification and verticalisation
should lead to improved monetisation in Nordic marketplaces
    ** The broker downgrades Scout24  G24n.DE  to "hold,"
pending visibility on the progress of its 2026 targets

 (Reporting by Elsa Ohlen)
 ((elsa.ohlen@thomsonreuters.com;))