Stifel Initiates Coverage of Online EU Delivery Stocks Via Investing.com

Investing.com — Stifel has initiated coverage on two top European online delivery companies, Delivery Hero ( ETR: ) and Just Eat Takeaway ( AS: ), as part of a broader analysis of the online food delivery sector.

The move comes at a crucial time as the industry transitions from years of rapid expansion, often referred to as “Blitzscaling,” to a focus on profitability and market leadership.

Both companies have undergone changes in their approach, with management teams focusing on optimizing portfolios by exiting less profitable markets and consolidating their dominant positions in key regions.

Stifel signals a clear preference for Delivery Hero, which has been given a “buy” rating and a €60 price target.

Delivery Hero’s strong growth potential, particularly in its core markets such as South Korea and the Middle East, is underscored by the company’s effective management of its portfolio, including recent strategic moves such as the planned IPO of talabat in the fourth quarter of 2024.

These steps are expected to crystallize value for shareholders. On the other hand, Just Eat Takeaway has been given a more cautious “hold” rating with a price target of €14.80.

While the company has made strides in improving margins, particularly in Northern Europe, its overall growth profile lags its peers, and near-term catalysts that could prompt a revaluation are currently lacking.

According to Stifel, both companies have faced challenges in maintaining profitability amid fierce competition, but the long-term outlook for the sector remains positive as the companies begin to realize the benefits of market leadership and operational streamlining.

Delivery Hero’s exit from less profitable regions such as Taiwan and Vietnam, and Just Eat Takeaway’s exit from New Zealand and France, reflect a wider trend of consolidation in the industry.

However, competition from global operators like Uber Eats (NYSE: ), DoorDash (NASDAQ: ) and emerging players like Meituan remains a key concern.

Analysts also shed light on the potential for future M&A activity that could further reshape the competitive landscape.

Stifel notes that major deals, such as the rumored takeover of Deliveroo ( OTC: ) by DoorDash, which could disrupt markets such as the UK and Ireland, can affect Just Eat Takeaway’s position.