Europe Media Classifieds: Earnings Momentum in an AI World

Goldman Sachs initiates coverage on European classifieds with a positive view, arguing that AI disintermediation fears are overblown and current low valuations (~10x EBITDA) provide an attractive entry point.

Key Takeaways

• 1.AI dis-intermediation risks for classifieds portals are overstated; incumbency, direct traffic, and vertical specialization remain strong moats.
• 2.M&A is a major catalyst for the sector, with historical transaction multiples (~19x EBITDA) far exceeding current trading levels (~10x).
• 3.Scout24 and Autotrader are prioritized (Buy ratings) due to expected earnings upgrades driven by market inflection points and pricing power.

Table of Contents

• Classifieds well positioned to benefit from AI-powered search
• Three risks to the classifieds model
• M&A provides an attractive backdrop
• Classified overview
• Metrics of Classified Comparison
• Scout24: Confidence in near- to mid-term growth; initiate at Buy with €105 PT
• German housing market environment supportive of strong growth for Scout24
• Autotrader: At an inflection point; initiate at Buy with 557p PT
• UK Autos: Is the UK market about to slow down, and what could that mean for Autotrader?
• Rightmove: Near-term earnings risks fairly reflected in price; initiate at Neutral with 516p PT
• Swiss Marketplace Group: Valuation reflects growth momentum; maintain Neutral and CHF32 PT