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Just Eat share price slides as Barclays lowers valuation

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Shares in Just Eat (LON:JE) have taken a hit today as Barclays lowered its price target on the online takeaway service. The move marks another blow for the company which this week lost its spot in the benchmark FTSE 100 index, alongside Royal Mail (LON:RMG).

As of 13:42 GMT, Just Eat’s share price had given up 4.04 percent to 542.20p, underperforming the broader UK market selloff which has sent the FTSE 100 2.37 percent lower at 6,757.90 points. The group’s shares have lost just under a third of their value over the past year, as compared with a near eight-percent drop in the Footsie.

Barclays trims price target

Barclays, which is ‘overweight’ on Just Eat, lowered its price target on the shares from 1,000p to 785p today. Proactive Investors reports that the analysts do not expect the downturn in consumer spending to hit the group as much as some have speculated, although they do think continued investment in logistics might limit earnings growth over the next couple of years.

“We see limited macro risk for Just Eat,” Barclays pointed out, as quoted by the newswire, adding that the “underlying market place business is performing well and earnings upside/downside into the coming years will largely be driven by discretionary investments into marketing and logistics”.

“To reflect updated guidance, and as we expect those investments to continue, we reduce our earnings estimates for 19/20” by around 16 percent, the broker concluded.

Other analysts on Just Eat

Deutsche Bank, which rates Just Eat as a ‘neutral,’ set a price target of 610p on the shares his week, while last week, Peel Hunt reaffirmed the company as a ‘sell,’ without specifying a valuation on the stock. According to MarketBeat, the blue-chip group currently has a consensus ‘buy’ rating and an average price target of 859.18p.

As of 13:56 GMT, Thursday, 06 December, Just Eat PLC share price is 540.80p.

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