According to the investment bank’s London arm, Just Eat’s recent full-year results suggested “weak” fourth-quarter order growth in the firm’s core UK market.
They pointed to a couple of recent developments – Uber Eats cutting its fees last month and agreeing to sponsor popular reality TV show, Love Island – as signs that Uber is ready to take the fight to Just Eat even more in the year ahead.
“These events have happened after the FY, but we believe are clear anecdotal evidence that Uber is becoming more aggressive in '19 in the UK, which remains ~90% of group EBITDA (underlying earnings),” read a note to clients.
The abacus rattlers reckon a break-up of the FTSE 250 group, as suggested recently by activist investor Cat Rock, could provide some “upside risk”, though.
“We see potential merit in this,” Barclays said.
“The industry has relatively quickly consolidated; we anticipate that this will continue and JE has assets which we believe could be non-core, which include Latin America and Australia.”
Uber Eats to buy Just Eat?
Just Eat could go one step further, according to one City analyst: Peel Hunt’s James Lockyer who has mooted the possibility of a Just Eat-Uber Eats tie-up.
“Could the Lyft IPO imply that Uber is coming to the market?” he asked.
“With cash raised, it could acquire Just Eat, solving a lot of issues. Just Eat: delivery through a larger entity. Uber Eats: enter marketplace model much faster.”
There was no mention of that from Barclays, which kept its 785p price target in place but cut its rating to ‘equal weight’ from overweight’, citing “limited upside” to its target.
Just Eat shares fell 1.3% to 770p on Thursday.