Swiss bank UBS has upped its target price for Just Eat PLC (LON:JE.) to 1,040p from 915p as it forecast strong growth trends in the online food delivery market.
Analysts at the bank said the FTSE 100 takeaway delivery company was “well positioned to benefit” from strong demographic trends, greater choice, increased logistics scale, and eventual automation in the food delivery market, which they forecast could grow to US$365bn by 2030 from US$35bn today.
READ: Deliveroo vs Just Eat: is the market big enough to accommodate both?
They added that the market was “overly cautious” on the group’s delivery services and was underappreciating the incremental revenue opportunity.
The bank also said the company had strong momentum in key markets such as the UK, Canada, Italy, and Brazil in contrast to competitors UberEATs and Deliveroo whose “strong share gains of 2016/17 (in terms of app downloads) seem to have stalled or reversed in most markets”.
“We believe this could mark a turning point regarding market sentiment for Just Eat, as a source of concern has been that Just Eat has been late entering the logistics market” UBS added.
In addition to the price target, analysts also reiterated their Buy rating on the stock while lifting its revenue forecasts for 2018, 2019, and 2020 by 6-7%.
In March, Just Eat saw a plunge in its share price after saying it would ramp-up its promotional and investment spending to offset growing competition from competitors such as Deliveroo and Uber Eats.
However, this impact was softened in May when the group reported a 49% jump in first-quarter revenue to £177.4mln from £118.9mln a year ago as total orders increased 32% to 51.6mln.
In mid-morning trading Tuesday, Just Eat shares were up 1.2% to 797p.