UBS has moved Scout24 SE up its recommendation ladder, upgrading the German online classifieds group from "neutral" to "buy" while simultaneously lowering its price target to €102.60 from €107.80. The bank attributed the rating upgrade to Scout24's perceived strength against artificial intelligence-related disruption, continued resilience in its core property classifieds business and revised, higher earnings projections. The reduction in the price target followed a change in UBS's valuation methodology.
In a research note dated Monday, UBS said Scout24 stands out inside the European online classifieds sector because it has relatively lower exposure to the risk of being bypassed by AI-driven solutions and faces comparatively reduced medium-term margin pressure. The upgrade arrives after Scout24's shares fell roughly 29% over the last six months, a decline UBS attributes in part to broader sector weakness.
The bank said its view is informed by a sector-wide assessment of generative AI risks. That analysis looked at the possibility of platforms being circumvented and the threat to margins from increased investment needs tied to AI. Within this framework UBS identified Scout24's focus on property classifieds as a more sheltered vertical and assigned the company the top rating on an internally developed "AI Readiness" metric.
The AI Readiness metric is designed to evaluate potential margin vulnerability by measuring a company’s investment capacity, technology infrastructure and progress on AI initiatives, according to UBS. The bank's assessment placed Scout24 at the head of the pack on that scale.
UBS also raised its explicit financial projections for Scout24. The bank nudged its revenue forecasts up by 1% for 2026 and 2% for 2027, and increased operating EBITDA estimates by 1% and 2% for those same years. On these revised figures, UBS said it now sits above consensus: group revenue estimates are 2% higher than consensus for 2026 and 3% for 2027, while operating EBITDA forecasts are 1% and 2% above consensus for 2026 and 2027 respectively.
UBS reiterated specific modelled figures for the company. Scout24 reported revenues of €566 million in 2024; UBS expects revenue to rise to €778 million in 2026 and to €868 million in 2027. Operating EBIT is forecast at €414 million in 2026 and €476 million in 2027, compared with €301 million in 2024. On an earnings-per-share basis, UBS projects diluted EPS of €4.18 in 2026 and €4.90 in 2027, up from €2.90 in 2024.
The note also addressed investor concerns about capital allocation after Scout24's acquisition of Spain's Fotocasa and Habitaclia in September 2025. UBS suggested that worries about an expansion of cross-border deals and downward pressure on shareholder returns appear exaggerated given the company's stated buyback programme.
Scout24's board has authorised share repurchases of up to €500 million for the period from Jan. 5, 2026, to June 30, 2028, including an initial tranche of up to €100 million that runs to July 2026. UBS said Scout24 had repurchased €22.1 million of shares in the first four weeks of that initial tranche and now expects total buybacks of €143 million in 2026 and about €451 million over the 2026-28 window.
For context, UBS compared its buyback expectations with a Visible Alpha consensus estimate of €498 million for the 2025-28 period.
As part of the rating change UBS moved from its prior valuation method to a discounted cash flow (DCF) approach. The bank used an 8.1% weighted average cost of capital and a 2.0% terminal growth rate in its DCF model. UBS said that the shift in valuation methodology resulted in a 5% reduction to its price target.
At Scout24's current share price of €74.05, UBS calculated a 4.9% free cash flow yield for 2026, noting that the figure compares with a sector average free cash flow yield of 5.4%.
UBS's move reflects a mix of strategic, financial and valuation considerations: the bank flagged AI-related vulnerability as a differentiator within the classifieds sector, adjusted its near-term revenue and EBITDA forecasts upward, confirmed a significant buyback programme, and adopted a DCF framework that produced a slightly lower price target despite the upgraded recommendation.