Get Premium Data for Cyber Monday: Up to 55% Off InvestingProCLAIM SALE

Stifel initiates coverage on EU online delivery stocks

Published 09-10-2024, 06:36 pm
© Reuters.
TKWY
-
DHER
-
UBER
-
DASH
-
ROO
-

Investing.com -- Stifel has initiated coverage on two leading European online delivery companies, Delivery Hero (ETR:DHER) and Just Eat Takeaway (AS:TKWY), as part of a broader analysis of the online food delivery sector. 

This move comes at a crucial time when the industry is transitioning from years of rapid expansion, often referred to as "Blitzscaling," to a focus on profitability and market leadership. 

Both companies have undergone changes in their approach, with management teams concentrating on optimizing portfolios by exiting less profitable markets and reinforcing their dominant positions in key regions.

Stifel flags a clear preference for Delivery Hero, which received a "buy" rating and a price target of €60. 

Delivery Hero's strong growth potential, particularly in its core markets such as South Korea and the Middle East, is underscored by the company's effective management of its portfolio, including recent strategic moves like the planned IPO of talabat in the fourth quarter of 2024. 

These steps are expected to crystallize value for shareholders. On the other hand, Just Eat Takeaway was given a more cautious "hold" rating with a price target of €14.80. 

While the company has made strides in improving margins, especially in Northern Europe, its overall growth profile lags behind its peers, and short-term catalysts that could drive a re-rating are currently lacking.

As per Stifel, both companies have faced challenges in maintaining profitability amid fierce competition, but the long-term outlook for the sector remains positive as companies begin to realize the benefits of market leadership and operational streamlining. 

Delivery Hero's exit from less profitable regions, such as Taiwan and Vietnam, and Just Eat Takeaway's retreat from New Zealand and France, reflect a broader trend of consolidation within the industry. 

However, competition from global operators like Uber Eats (NYSE:UBER), DoorDash (NASDAQ:DASH), and emerging players such as Meituan remains a key concern.

The analysts also shed light on the potential for future M&A activity, which could further reshape the competitive landscape. 

Stifel notes that major transactions, such as a rumored takeover of Deliveroo (OTC:DROOF) by DoorDash, could disrupt markets like the UK and Ireland, potentially affecting Just Eat Takeaway's position.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.