Just Eat’s (LON:JE) share price has fallen into the red in London in today’s session as Berenberg Bank trimmed its stance and valuation on the company. The move comes after RBC Capital Markets reaffirmed the online delivery service as a ‘top pick’ earlier this month, arguing that the shares should re-rate from here.
As of 14:01 BST, Just Eat’s share price had given up 0.75 percent to 631.40p, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.32 percent lower at 7,525.00 points. The group’s shares have given up a little over a quarter of their value over the past year, as compared with about a two-percent drop in the Footsie.
Berenberg trims rating on Just Eat
Berenberg Bank lowered its rating on Just Eat from ‘buy’ to ‘hold,’ further trimming its price target on the shares from 880p to 600p. Sharecast quoted the broker as commenting that the online delivery service’s story was “a far cry from the clean ‘winner takes all’ narrative it once was”.
“Uber’s IPO and Amazon’s recent backing of Deliveroo (subject to approval) suggests competition is likely to get tougher rather than easier, and we question whether Just Eat’s board will approve the disposal of its best assets during the investment phase,” the analysts elaborated, adding, however, that Just Eat’s shares were trading near their new base-case valuation, where they now assume that delivery (ex-Canada) continues to be loss-making until 2023.
Other analysts on takeaway service
Analysts at Liberum reaffirmed the FTSE 100 company as a ‘buy’ last week, without specifying a target on the Just Eat share price. According to MarketBeat, the online takeaway service currently has a consensus ‘buy’ rating and an average valuation of 790.31p.
Just Eat is scheduled to update investors on their interim performance on July 31.