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Purplebricks takes a hit as UBS highlights slowdown
Purplebricks was under the cosh on Thursday as UBS pointed out that growth is slowing at the online estate agent, while competitor Yopa is making progress.
The bank's property listings tracker signals that growth has slowed for Purplebricks, which is rated at 'sell'. Between September 2017 and March 20178, the company's market share of all listings was up by just 0.3% to 3.8%, down from a more than 1% increase in the previous six months. Meanwhile, competitor Yopa continues to increase its share, albeit from a much lower base.
"Purplebricks' share of subject to contract listings has also remained static at circa 5% over the last six months, indicating a potentially slower rate of sales relative to new instructions. We believe that a deceleration in growth at this stage is below expectations, with a re-evaluation of the medium term potential of Purplebricks both in the UK and internationally required if this slowdown persist."
In the same note, UBS maintained its 'buy' rating on Foxtons. It said that while the London market continues to be a weakness, the company is well positioned, with a net cash balance sheet, well controlled cost base and stable lettings business all supportive.
The bank trimmed its price target on Foxtons to 110p from 115p.
At 1610 GMT, Purplebricks shares were down 5.4% to 340.60p and Foxtons shares were up 2.2% to 80.70p.