After the closing bell in New York on Thursday, Uber filed an S-1 form with US regulators, setting the stage for a float that could value the company at more than US$100bn.
According to reports, Uber will look to raise around US$10bn in fresh capital as part of its listing, which Peel Hunt has speculated it could use to beef up its Uber Eats food delivery arm.
Analysts argue that, that side of the business has rapidly gained market share and has established itself as a key part of the overall group, so it makes sense for bosses to plough more money into it.
“Of the 91mln monthly actives on [Uber’s] platform, over 15mln received a meal using Uber Eats in the quarter ended 31 December 2018, using its network of 220,000+ restaurants in over 500 cities around the world,” read a note to clients.
“In the same quarter, consumers who used both a taxi and Uber Eats had 11.5 trips per month on average, compared with 4.9 trips per month on average for consumers who used a single offering in cities where both were offered.
“Moreover, the synergies are obvious: Uber Eats attracts new consumers to its network – in the same quarter, 50% of first-time Uber Eats consumers were new to [Uber’s] platform.”
‘Sell’ rating repeated
They concluded: “Overall, this heavy investment, new primary proceeds, and the strong performance year-on-year shows that Uber is a continuing and growing threat to Just Eat.”
The analysts repeated their ‘sell’ recommendation for Just Eat, as well as their bearish 520p price target.
In early afternoon trading on Friday, Just Eat shares were up 2.1% to 736p.