Just Eat share price surges despite hit to profit

on Jul 31, 2019
Updated: Mar 11, 2020

Just Eat’s (LON:JE) share price has surged in London in today’s session even as the company posted a fall in earnings and profit for the half-year ended June 30. The update comes after earlier this week, the online delivery service reached a merger agreement in principle with Dutch company Takeaway.com.As of 09:54 BST, Just Eat’s share price had added 2.21 percent to 766.60p. The shares are outperforming the broader UK market, with the benchmark FTSE 100 index having slipped into the red and currently standing 0.35 percent lower at 7,620.07 points.Just Eat posts half-year resultsJust Eat reported in a statement today that its revenue had surged 30 percent to £464.5 billion in the first half of its financial year. The group’s profit before tax, however, slumped 98 percent to 0.8 million, while net cash generated by operations came in 15 percent lower at £65.9 million.The company, however, maintained its full-year guidance, noting that it expects to deliver revenue between £1 billion and £1.1 billion and uEBITDA between £185 million and £205 million. Both figures exclude Brazil and Mexico, which are expected to report an uEBITDA loss in the range of £80 million to £100 million for the full year.“We’ve been working at pace and made good progress in the first half of the year to become the preferred food delivery app for our customers,” Just Eat’s interim CEO Peter Duffy commented in the statement.Analysts on online delivery groupJPMorgan Chase lifted its stance on the online delivery service to ‘neutral’ yesterday and further hiked its target on the Just Eat share price from 600p to 800p, while Deutsche Bank reaffirmed the company as a ‘hold’ without specifying a valuation on the stock. According to MarketBeat, Just Eat currently has a consensus ‘buy’ rating and an average price target of 799.69p.

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