The latest City analyst’s report has suggested to investors that it is better to be “happy” than “smart”– references to, respectively, the Rightmove and Zoopla advertising campaigns.

The report, from Exane BNP Paribas, says more agents are so far known to be leaving Zoopla than expected – a total of 764 branches.

Looking at the impact, as so far known, of Agents’ Mutual’s “one other portal” rule, it estimates that of those that have so far quit one of the big two, 82% of that churn has been from Zoopla and 18% from Rightmove.

Analysts had previously forecast the churn to be split 45% from Rightmove and 55% from Zoopla.

Of those agents who have made their “one other portal” decision known, the report says 133 branches are quitting Rightmove and 600 leaving Zoopla.

But to that Zoopla number it adds a further 164 – the 1% churn referred to when the company’s results were announced in November.

The report tips Rightmove as an outperform – although cutting its target price by 3% – but downgrades Zoopla from neutral to underperform, and cuts its target price by 18%.

The report says: “We expect this divergent performance to continue.

“We are more cautious on Zoopla as we are concerned that the impact of Agents’ Mutual is under-estimated … with the group being more exposed as the number two player.”

The report also says that Zoopla had been expected to do particularly well in London because of its PrimeLocation brand.

However, it says that this dominance has not materialised and that “Rightmove’s success in protecting its position in the lucrative prime London market is a further positive and surprise versus market expectations…

“We believe the PrimeLocation brand has lost its lustre with consumers and has declined as a focus for property search.”

It believes that in London, just 32 branches have opted to come off Rightmove, with 162 coming off Zoopla.

The report concludes: “We see the typical agent as significantly more likely to cancel their Zoopla subscription if they choose to join Agents’ Mutual.”

Exane expects around 3,100 branches to actually join Agents’ Mutual at launch, quitting either Rightmove or Zoopla. It estimates there are currently 4,500 AM members –  although noting that updated membership numbers have not been given since October – but believes that only 80% will take up actual membership.

However, the report is not particularly optimistic regarding Agents’ Mutuals’ long-term chances of success.

It expects total branch membership to remain below 20% of the industry in the next three years, and that “structural issues will challenge its longer-term growth prospects”.

It believes that Agents’ Mutual will have a limited marketing spend – far smaller than that of Rightmove and Zoopla – and will “struggle to build the required audience to challenge the incumbent property portals”.

And despite its further downgrading of Zoopla, it nevertheless expects Zoopla to grow its revenue by 6% this year – and Rightmove to grow its by 12%.

The report also points out that Countrywide, the UK’s largest agent, has signed a five-year contract with Rightmove, and that “a number of the largest agents are substantial shareholders in Zoopla”.

Zoopla shares ended yesterday at a new closing low of 182p, down 11p (5.8%) on the day.

Rightmove’s shares bounced 57p (2.6%) to 2252p.

The analyst’s full report is here