Moneysupermarket.com Group PLC downgraded to ‘hold’ by Liberum as growth drags

Group PLC () was downgraded to ‘hold’ from ‘buy’ by Liberum due to multiple headwinds dragging growth.

The price comparison website is expected to lose in the landgrab for customers now that GoCo has a larger audience to market to for automated switching, following the Future acquisition.

READ: Moneysupermarket searches squeezed across all channels in third quarter

This segment was a key opportunity to catalyse sales and earnings growth for Moneysupermarket as the product offers a service to the market that previously was not monetised by the core price comparison services.

However, GoCo now holds the same scale and engagement of audience through Future’s consumer magazine portfolio, and given the low churn rates within these divisions it will become more difficult for Moneysupermarket to seize customers in a ‘landgrab’ environment.

Moreover, travel disruption and removal of the loyalty penalty in motor and home will result in fewer attractive insurance deals, and continued credit tightening and lack of product will drag on Money, resulting in lower earnings compared to previous expectations, the broker said.

That’s because the Financial Conduct Authority regulation for insurance providers that removes penalties for loyalty will in turn produce fewer deals and hit interest in switching.

Analysts cut the target price to 290p from 335p although they said these headwinds within travel and money will reverse in the long term.

Shares dipped 2% to 261.98p on Monday morning.