Just Eat Takeaway.com's (LSE:JET, NASDAQ:GRUB) glass is “half full” according to Deutsche Bank which has slashed its price target ahead of its first-half results, due next week.
Analysts at the German bank expect the food delivery service to confirm targets for profitability and cash flow, although these reassurances will be offset by another quarter of falling gross transactions value year-on-year.
“The stock weakness year-to-date reflects concerns on consumer demand and broader macro,” the broker said in a note.
Deutsche Bank cut the target price to €25 from €35, although it did reiterate its Buy rating on the stock, citing room for a re-rating once growth comes back.
Speaking on the wider food delivery sector, the broker feels “incrementally more cautious on the outlook.”
“Demand appears to be moving backwards as food delivery fees increase. The convenience of the service should be the main driver of future consumption and this scales back the pace of growth, especially in more mature markets.”