It’s been a terrifyingly rough year for FTSE 100 property listings stock Rightmove (LSE:RMV). It’s sank 31% in value on an uncertain housing market outlook, and concerns that artificial intelligence (AI) will drive up costs and hammer user engagement.
But could Rightmove’s share price be set for a stunning recovery? The 17 analysts with ratings on the Footsie firm think it might — their average 12-month price target is 576.4p. That’s up 26% from current levels of 459.3p.
I’m far from convinced, however. Here’s why I’m avoiding Rightmove shares like a bad curse today.
What’s going on?
There’s no doubting that Rightmove is the king of the UK property listings market. According to Comscore, it commanded 89% of all consumer time spent on property portals last year.
This economic moat gave it an enormous operating margin of 70% last year, and helped revenues rise 9% year on year. These drove underlying operating profit 9% higher too.
The problem is sales and earnings are in severe danger if the UK housing market cools, and the risks of this happening are growing. Britain’s economy remains in low growth mode, with unemployment rising and wage growth cooling, casting a shadow over homebuyer activity.
What’s more, conflict in the Middle East is fuelling inflationary pressures, and the interest rate cuts analysts were predicting now appear highly unlikely. If oil prices keep surging, the central bank may even raise lending rates.
What about the AI threat?
Arguably though, this isn’t the greatest danger to Rightmove’s earnings and by extension its share price. The business is investing heavily in AI, meaning it expects underlying operating profits to grow just 3%–5% in 2026. It’s possible that these costs could surpass forecasts and remain elevated for some time.
The other major AI threat Rightmove faces is related to model disruption. If AI generative tools begin to aggregate and then deliver searchable property listings, could traffic to the company’s online portal collapse? It’s not out of the question, in my view.
Could Rightmove shares rebound?
It’s possible that the Rightmove share price could bounce back over the next year as analysts expect. A quick resolution to the Middle East conflict may be essential for this to happen, leading central banks to consider cutting interest rates again. Rising competition in the mortgage sector could also boost buyer affordability and therefore searches on its online platform.
Rightmove shares are also now so cheap that investors could pile back in if news flow does indeed improve. Its forward price-to-earnings (P/E) ratio is 15.4 times. To put that in context, that’s miles below the 10-year average of 29–30.
Having said all that, I’m still not tempted to buy the FTSE 100 stock for my portfolio. While I’m confident the housing market will improve strongly over time, the threat of AI disruption — and a potential share price washout like we’ve seen with many software shares — is too great for my liking. I’d rather find other shares to buy right now.
