Just Eat Takeaway.com NV (LSE:JET, NASDAQ:GRUB) is expected to produce higher profits in 2024 than originally forecast by analysts after the takeaway company pointed to several tailwinds in its full-year results.
Shore Capital raised its 2024 underlying earnings guidance to €460 million, €10 million ahead of company guidance and 44% higher than its 2023 profits.
North American margins finishing 2023 in a stronger position are behind the rise, alongside an easing of cost pressures in the UK and Ireland and gross transaction volume growth, excluding the US, already being ahead of guidance of 7%.
“We believe positive order growth in northern Europe and UK&I will outweigh a weak southern Europe and New Zealand, driven by strong UK&I price reinvestment, logistics coverage expansion in N. and the introduction of a NE subscription service,” Shore Capital said.
Profits are expected to be impacted in the first six months of 2024 in North America due to the cost of rolling out logistics, however, the UK broker doesn’t believe these levels will reflect the “new normal”.
Therefore, Shore Capital retains its ‘buy’ rating for Just Eat, targeting a 2,100p share price, almost a 73% premium to the company’s current value.
Last week, Just Eat shares tumbled after investors were discouraged by the lack of shareholder buyback announcements, taking focus away from the fact both earnings and guidance beat expectations.