Property portal Rightmove is in pole position to be relegated from the FTSE 100 in this week’s reshuffle of the blue chip index.
Helal Miah, investment research analyst at The Share Centre, said the portal has had a tumultuous year.
The share price reached a high in May on the back of merger and acquisition activity in the sector, but this led to increased competition from the likes of Zoopla and Purplebricks.
“This is likely to be the reason why the company finds itself in this vulnerable position,” Miah said.
A weak housing market in London and the South East and what the group describes as a “muted sentiment towards the UK property market” continue to weigh.
However, this didn’t stop the group reporting a 10% year-on-year increase in revenue and 12% rise in operating profit.
“It could be that the bad traits are just outweighing the good at the present time, sending the group in the wrong direction and ultimately to the bottom of the FTSE 100,” Miah said.
The comments come after analysts cut their rating for Rightmove to underweight from neutral at the start of the year, citing increased pressure on traditional agents’ commission rates following the rise of online rivals.
The FTSE 100 contains the 100 largest companies by market capitalisation listed on the London Stock Exchange.
Other companies facing relegation from the FTSE 100 include insurance giant Direct Line and UK water supplier Severn Trent.
On the flipside, engineering company Spirax Sarco Engineering could be in line for a promotion from the FTSE 250, along with fellow engineers John Wood and Weir, according to The Share Centre.
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