Zoopla rallies on Barclays upgrade

Near term, the bank said current trading for uSwitch was likely strong, leading to potential consensus upgrades.

Beyond that, it sees several sources of upside and thinks management’s vision – presented at the investor day – will refocus attention on them.

“We see an excellent standalone business in uSwitch, which the market is now more aware of (but doesn’t yet fully appreciate in our view). And we understand the logic behind Property Software Group.

“But in our view, the market is not pricing in synergies between the businesses and doesn’t fully appreciate the long-term vision the management team has for putting it all together. We see the investor day as an opportunity to increase understanding here, and a refresh for how people value the business.”

The bank said the obvious pushback is the outlook for the property portal business.

In the event of a weaker UK property market, it sees a balancing act between the potential for Onthemarket to crumble, risks that agents could shift to Rightmove only, and the number of agents reducing.

“But our forecasts are conservative, and our analysis of the underlying Property Services multiple suggests caution is priced in.”

At 0903 BST, Zoopla shares were up 6.5% to 326p.