Barclays downgrades MoneySupermarket and Rightmove

Barclays downgraded its recommendation on shares of MoneySupermarket and Rightmove following the "jolt" of the UK referendum and after adjusting its forecasts for European Media companies based on its new assumptions for FX rates and lower macroeconomic assumptions.

The broker also rejigged its methodology for assigning a multiple to its forecasts for companies in the space.

To do the latter it used the relationship between gross domestic product and price-to-earnings multiples for southern European countries in the aftermath of the 2011-2012 'double-dip' as that was the situation which Barclays believed most resembled the current one.

Also, based on the de-rating seen in US names following the 2008-2009 downturn (65% on average) - but given they did not expect anywhere near such a severe fall in GDP - they assumed a 30% discount to the pre-referendum multiple as a starting point for Rightmove and Moneysupermarket.

The analysts downgraded their recommendation on shares of Rightmove from 'overweight' to 'underweight' and lowered their target price from 4,550p to 4,300p.

In parallel, shares of MoneySupermarket were downgraded from 'overweight' to 'equalweight' and their target from 390p to 260p.