UBS has downgraded Zoopla to a 'neutral' recommendation from 'buy' due to continued competitive pressures from rival OnTheMarket (OTM) which it says is nevertheless "unlikely to be a long term player". Rightmove retained its 'buy' recommendation.
UBS says the decision was based on data collated by its Evidence Lab research team which shows real estate agency consortium OnTheMarket had continued its momentum the UK property portal market place during 2016.
The research showed OnTheMarket grew 6.8 per cent ahead of Rightmove's 1.1 per cent compared with Zoopla's 0.7 per cent, as well as increasing its share of app downloads.
UBS also says while OTM has grown its share of agents in the first quarter Zoopla "continues to show no sign of a significant recovery in agents".
The quarter saw Zoopla's agent growth at 3.3 per cent compared to OTM's growth rate of 18.5 per cent.
Despite this UBS maintains its view that OTM is unlikely to be a major long-term player, even though it currently remains a threat for the number two player Zoopla, "which has been more impacted since OTM's launch."
UBS adds Rightmove's market leading position remains strong with year-on-year agent growth of 4.9 per cent to March and leading app stats being supportive of this.
"Overall, we see the launch of OTM as having actually strengthened the position of Rightmove by making it a stronger number one in the segment, with Rightmove now having circa 65 per cent more properties listed for resale than Zoopla," UBS confirms.
Zoopla's target price was nevertheless slightly increased to 260p from 250p.