Barclays upgrades Just Eat to 'overweight' ahead of merger
By Iain Gilbert
Date: Monday 27 Jan 2020
(Sharecast News) - Analysts at Barclays mechanically upgraded food delivery group Just Eat to 'overweight' on Monday ahead of the group's relaunch as Just Eat Takeaway on 31 January.
Barclays said it was "not too concerned" about the last-minute investigation into the group's merger with Takeaway.com by the Competition and Markets Authority, stating that while it was surprised by the move, it still expects approval and asset integration to "happen quite fast".
The bank highlighted that value was "well underpinned" in Takeaway given its "clear leadership positions", underlying earnings ramping up very quickly in Germany, medium-term potential to increase take rate and the recent launch of B2B.
"But we also see scope for value accretion in JE from potential asset sales, consolidation and turnarounds," said Barclays, which started conservatively when it came to its valuation of Just Eat's European assets.
"Our base case pro-forma JET SOTP leads to a PT of €100 on TKWY, and 1,018p on JE. Our upside case is €145/1,476p - we show a bridge inside as to the levers of this upside. Downside of €70/713p if European turnaround doesn't happen. This story has lots of SOTP optionality."
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