Just Eat share price: Liberum remains bullish on online takeaway service

Liberum remains bullish on Just Eat (LON:JE), arguing that recent newsflow has provided ‘positive read across’ for the outfit, Sharecast reports. The comments come ahead of the company’s first-quarter update on April 26.

Just Eat’s share price has climbed higher in London in today’s session, having gained 2.14 percent to 736.40p as of 10:31 BST. The group’s shares have added just under one percent to their value over the past year.

Liberum bullish on Just Eat

Liberum reaffirmed Just Eat as a ‘buy’ this week, following rival Takeaway.com’s first quarter trading update which revealed a 27-percent like-for-like order growth, pointing to growth potential left in the food delivery market on offer in the sector. Sharecast quoted the broker as commenting that with nearly 40 percent of the UK market still remaining as telephone orders, plenty of runway for growth remained for Just Eat.

The analysts separately pointed out that Uber was reportedly looking to raise a $10-billion war chest, which, Liberum reckons, could be used for acquisitions in one obvious area, food delivery services, where it already has Uber Eats.

“The most likely scenario is that it looks to acquire Deliveroo, which operates in 12 countries and which is competing with Uber Eats in the UK for the #2 spot after Just Eat,” the broker pointed out, adding, however, that it saw “little material threat to Just Eat,” if that happened, with the combined entity “likely to be distracted by integration issues”.

“Also […], the food delivery market has the characteristics of other classified portals such as autos and property (and the old Yellow Pages market) where scale creates a virtuous circle effect,” the analysts continued, adding that they thought “Just Eat is essentially at the point of reaching this virtuous point”.

The other option was that Uber would use the cash to buy Just Eat, Liberum pointed out, as quoted by Sharecast.

Other analysts on company

JPMorgan Chase & Co, which is ‘overweight’ on Just Eat, boosted its price target on the shares from 815p to 859p this week, while Peel Hunt remains bearish on the company with a ‘sell’ rating. According to MarketBeat, the online takeaway service currently has a consensus ‘buy’ rating and an average price target of 880.93p.