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Just Eat (JE.)

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RBC Capital reiterates 'top pick' on Just Eat, sees re-rating from here

03 Jul 19

LONDON (ShareCast) - (Sharecast News) - Just Eat got a boost on Wednesday as RBC Capital Markets reiterated its 'top pick' on the stock, saying the shares should re-rate from here.
"Just Eat shares continue to lag the sector on competition concerns," it said. "We believe a re-rating is due, which we expect to be triggered by accelerating momentum in the UK from Q2."

The bank said low consensus expectations are "very achievable" and there is "decent upside risk".

Consensus revisions have overshot on the downside, it said, but it expects group margins to improve from FY20e driving a 27% three-year earnings per share compound annual growth rate.

RBC also pointed to the fact that Just Eat's profitability is diversifying away from the UK. It expects earnings before interest, tax, depreciation and amortisation outside of the UK to represent 35% of the group in the next three years, versus 5% in FY18.

"In addition to the marketplace, we expect SkipTheDishes to be an important driver of profit growth going forward, which gives us confidence in our above-consensus earnings estimates," it said.

The bank's FY20-21 revenue estimates are 2-7% above consensus, while its FY19-21 EBITDA estimates are 6-15% above consensus.

RBC Capital has a 900p price target on the stock.

At 1545 BST, the shares were up 1.5% at 623.80p.

Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.


Market Data

Currency UK Pounds
Price 861.00p
Closing Price Change 0.000p
52 Week High 901.00p
52 Week Low 587.40p
Volume 0
Shares Issued 683.15m
Market Cap 5,882m


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