Moneysupermarket.com Group Plc (MONY), the U.K.’s largest price-comparison website, extended gains after JPMorgan Chase & Co. said concern about competition from Google Inc. (GOOG:US) was excessive.
The stock rose 2.2 percent to 184.2 pence, the highest price since November 2007, in London. Trading volume was more than five times the three-month daily average. The shares have gained 16 percent since the Chester, England-based company said a week ago that 2012 earnings would beat analyst estimates.
“Recent news flow underlines our view that concerns over competition from Google appear largely overdone,” Marcus Diebel, an analyst at JP Morgan, said in a note to clients yesterday. “We see ongoing earnings upside risk.”
Google, which is under investigation by the European Union over allegations that it promotes its own specialist search services over rivals, started a credit-card price comparison website in March and a car insurance site in September. Moneysupermarket is confident that the competition won’t reduce profits even if it eats into sales, Chief Executive Officer Peter Plumb said in an interview in November.
The shares have surged 32 percent in the past three months, seven times the 4.6 percent gain in the FTSE All-Share Index. Since the company’s Jan. 11 trading statement, at least six analysts have raised their 12-month share price targets. Diebel, who has an overweight recommendation on Moneysupermarket, raised his target to 212 pence, the highest of any of the 13 analysts tracked by Bloomberg who cover the stock.
Investors are missing the fact that Moneysupermarket is also likely to gain further market share as consumers switch from personal computers and laptops to mobile and tablet devices, Diebel said.
Moneysupermarket may also have scope to pay a higher dividend than investors expect, he said. The valuation still looked attractive at a time when annualized earnings before interest, taxes, depreciation and amortization are set to increase by more than 20 percent between 2012 and 2014, Diebel said.
Moneysupermarket covers all the main price comparison sites, including money, insurance, travel and energy, unlike rivals such as Gocompare, Comparethemarket and Uswitch.
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