UBS sees for Scout24 near-term asymmetric risks and long-term revenue opportunities

Scout24 SE

23/11/2023 13:56

** UBS assumes coverage of the online property platform
Scout24  G24n.DE  with 'neutral' (prior rating 'sell'), being
positive on long-term revenue opportunity within Scout24's
adjacencies, but flagging some uncertainty on leads margins,
which contribute to risk asymmetry
    ** The broker says the company scores well on broker's six
key drivers (structural migration, monetization, competitive
positions, adjacencies, cyclicality, ecosystem stability)
    ** Scout24 growth ambitions would likely require inorganic
leads, which could further strain margins and limit profit
accretion - the brokerage
    ** We believe the underlying strength depends on an
ultimately uncertain continuation of the "Goldilocks
temperature" in the German real estate market, UBS writes 
    ** Both improvement and deterioration in the real estate
market could negatively impact Scout24's key profit driver, it
adds
    ** The broker sees the consensus for lead income as "too
aggressive" (UBSe -8% vs. consensus for OTPs and mortgages in
FY24e), posing a downgrade risk
    ** Out of 18 analysts that cover Scout24, 15 rate the stock
"strong buy"/"buy,"​ and three rate it "hold" - LSEG

 (Reporting by Mateusz Dobrzyniewski)
 ((Mateusz.dobrzyniewski@thomsonreuters.com))