Rightmove (LON: RMV) is set to publish its 2022 preliminary results Friday, March 3, and with concerns about the housing market, could we see a negative share price reaction?
Rightmove is up over 7% so far this year, but it has declined since the start of the month, suggesting investors could be worried…
We said back in August that we saw more downside for the stock, which ended up moving around £2 lower, but as of now, we sit neutral on the stock as current data surrounding demand trends and the overall housing market is somewhat conflicting.
According to Bloomberg, citing data from the Bank of England, Land Registry, and ONS, UK housing affordability is at its most stretched since 1876.
Meanwhile, Rightmove’s House Price index for February showed average asking prices for British residential property recorded the smallest February rise on record…
Even so, the company said, “increasing numbers of buyers are returning, with the market starting 2023 much better than many expected.”
Focusing on Rightmove itself, web traffic is at all-time highs, while Google Trends data shows searches for the website have remained stable.
The online housing website said in its half-year results in July that it expected Average Revenue Per Advertiser growth in the second half of the year “broadly to mirror pre-pandemic growth levels, while still likely to exceed previous guidance for the full year,” adding that it was confident in delivering its expectations for the full year and beyond.
Analysts are split in their view of the stock heading into the results…
According to Tipranks, one analyst has a Buy rating on the stock, with two at Hold and two at Sell. The average price target is 565p per share.
Bottom Line: Overall, housing data and Rightmove demand data do not provide conclusive evidence for us to hop either side off of the bullish/bearish fence…
However, despite the constant calls of a housing market crash, we would not be surprised to see Rightmove surprise with a slightly more favourable report and outlook.
By Sam Boughedda