Liberum remains bullish on Just Eat (LON:JE), arguing that this week’s fall in the shares was overdone, Citywire reports. The blue-chip group’s stock came under pressure following news that rival Deliveroo would allow restaurants to use their own drivers for delivery, and that it was adding 5,000 new restaurants to its platform.
Just Eat’s share price has fallen into the red in today’s trading, having given up 1.41 percent to 800.40p as of 14:33 BST. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 1.02 percent lower at 7,686.37 points. The group’s shares have added nearly 24 percent to their value over the past year, as compared with about a 3.6-percent gain in the Footsie.
Liberum upbeat on Just Eat
Liberum reiterated its ‘buy’ rating on Just Eat today, with a price target of 850p on the shares. Citywire quoted the broker’s analyst Ian Whittaker as commenting that the fall in Just Eat’s share price had been an ‘overreaction,’ with the broker doubting that “restaurants would switch to Deliveroo from Just Eat’ as the latter had ‘major first mover advantage”.
The analyst further reckons that the two delivery companies are “in some way operating in different markets,” with Deliveroo targeting higher-end restaurants and Just Eat catering to the mass market. Whittaker also notes that “there is a network benefit effect which creates a virtuous circle for a market leader – and this means Just Eat is likely to continue the bulk of the shift from telephones to online delivery”.
Other analysts on FTSE 100 group
Barclays reaffirmed Just Eat as an ‘overweight’ yesterday, without specifying a price target on the shares, while Peel Hunt continues to see the FTSE 100 company as a ‘buy’. According to MarketBeat, the blue-chip delivery group currently has a consensus ‘buy’ rating and an average price target of 856p.