According to the Swiss investment bank, based on the current Just Eat share price, the FTSE 250 group’s Latin American, Brazilian and Australian assets are worth £700mln.
This is “too pessimistic”, UBS argues, especially given that the iFood joint venture in Brazil could easily be valued at upwards of £750mln on its own.
“iFood has been seen as one of JE's best assets, with triple digit order growth and over 80% market share, particularly after it turned profitable in 1H18,” read a note to clients.
“We think JE share of this asset could be worth £760mln, using precedent transactions multiples, i.e. potentially 15% of the JE share price.”
'Trough in sight'
But after years of negative earnings per share momentum, the analysts believe “the trough is likely in sight”.
“We see multiple positive catalysts in 2019: double-digit year-on-year UK order growth, SkipTheDishes (Canada) turning profitable, and optionality from the sale of Latam assets.”
UBS trimmed its price target to 870p (from 930p) to reflect a “costlier delivery roll-out”, but it kept in place its bullish ‘buy’ recommendation.
Just Eat shares edged 0.7% higher to 735.8p in mid-morning trading on Tuesday.