RBC Capital Markets continues to see Just Eat (LON:JE) as a ‘top pick,’ saying the shares should re-rate from here, Sharecast reports. The comments come ahead of the online delivery service’s interims on July 31.
Just Eat’s share price has surged in London in today’s session, having added 1.83 percent to 635.00p as of 10:09 BST, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.04 percent higher at 7,612.64 points. The group’s shares have given up just under 20 percent of their value over the past year, as compared with about a 0.4-percent fall in the Footsie.
RBC upbeat on Just Eat
RBC Capital Markets reaffirmed Just Eat as a ‘top pick’ yesterday. Sharecast quoted the broker as commenting that the FTSE 100 company’s “shares continue to lag the sector on competition concerns,” and that they believed that “a re-rating is due, which we expect to be triggered by accelerating momentum in the UK from Q2”. The analysts further reckon that low consensus expectations are ‘very achievable’ and there is ‘decent upside risk’.
RBC also pointed to the fact that Just Eat’s profitability was diversifying away from the UK. It expects earnings before interest, tax, depreciation and amortisation outside of the UK to represent 35 percent of the group in the next three years, versus five percent in FY18.
Just Eat updated investors on its first-quarter performance in April, posting disappointing order growth, with performance impacted by a strong comparator, the unseasonably warm weather in February, as well as the timing of Easter this year.
Other analysts on group
Peel Hunt reaffirmed the FTSE 100 company as a ‘sell’ today, without specifying a target on the Just Eat share price. According to MarketBeat, the blue-chip group currently has a consensus ‘hold’ rating and an average valuation of 803p.