Financial Trading Blog
Stock of the day 26/02/2016 – Just Eat PLC
Overcoming the August to October plunge that plagued companies market-wide with aplomb, Just Eat managed to end its first full year of trading on a relative high, closing out 2015 at £4.93, not too far away from its post-Tory election win all-time intraday peak of £5.22. This despite the bizarre investor reaction to the company’s third quarter results in November, the stock falling as much as 6% even as Just Eat increased its full year revenue forecasts by 4% to £240 million.
(Source: IT-Finance.com 26/02/2016)
However, in what has become a well-worn story already this year, Just Eat took a bit of a battering as 2016 got underway. Even a strong update in mid-January couldn’t help, the company slipping despite revealing a 46% rise in like-for-like orders alongside an impressive 57% surge in total orders for 2015, in part thanks to its string of acquisitions in France, Mexico, Australia and New Zealand. Things got even worse as January began to wrap up, the stock falling a further 10% after Morgan Stanley reduced its rating to ‘underweight’ from ‘equal weight’ due to the rise of rivals like Hungary House and, more recently, Deliveroo.
This saw Just Eat enter February at £3.60, before bouncing back to £3.80 (and touching £4) after announcing it had bought 4 companies (Spain’s La Nevera Roja, alongside hellofood Italy, hellofood Brazil and hellofood Mexico) from Rocket Internet and foodpanda for €125 million, investors impressed by the firm’s continued international expansion. Yet the market turmoil soon sapped the energy from Just Eat, the company losing all of its post-acquisition gains to plunge to a 13 month intraday low of £3.20. Since then the stock has recovered somewhat, with a ‘Buy’ rating from Investec and an 'overweight’ rating from Barclays helping it climb to a current trading price of £3.96 (IT-Finance.com, 26/02/2016).
In terms of the company’s full year figures focus will be on Just Eat’s promise of a higher than expected increase in revenue, to the aforementioned £240 million. Any update on its recent (and any future) acquit ions will also be welcomed by investors.
Just Eat PLC has a consensus rating of ‘Buy’ with an average target price of £5.20.
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