Evolution cut its valuation 10p to 560p, despite 10 per cent revenue growth. Concerns about rising programming and transmission costs mean it sees the 50 per cent earnings growth as too optimistic. Other worries include threats from web rivals and regulators, and necessary investment denting operating leverage.
Execution has raised its rating to “buy” and target price to 320p, believing new CEO Dalton Phillips will continue growth. Execution is “encouraged by excellent references from former colleagues and examples of his prior operational success”. This overrides potential concerns that Phillips has never run a quoted company before.
Substantial website modifications at Rightmove include upgrading maps to Google to improve user experience, says Numis, which will reinforce Rightmove’s market position. Numis restates its 2010 forecasts of pre-tax profit of £45m but now calls these estimates conservative. It names Rightmove as a key pick for 2010.