Foxtons Group - Strategic momentum and M&A adds to value

In Q323, all three of Foxtons’ divisions outperformed their respective markets, taking market share – the direct result of management action to avoid the same mistakes made during previous downcycles where costs were cut, a position from which it would subsequently struggle to recover. Foxtons’ new strategy focuses growth on non-cyclical revenue streams and decouples performance from sales market cycles. The latest value-enhancing acquisition leads to a net upgrade in estimates in FY24. We therefore raise our ‘base’ case valuation from 59p/share to 62p, which implies more than 60% upside, and our preferred ‘bull’ case valuation from 124p/share to 127p.