Just Eat Takeaway (AS:TKWY) (JTKWY) shares rallied Thursday after Bank of America analysts upgraded the stock to Buy from Neutral with a new price target of €15.40, up from €15 per share.
The analysts noted that more than half of the business today is sustainably profitable, the balance sheet is strong, and there is scope for cash return. Both Just Eat's Euronext Amsterdam-listed shares and its London-listed shares are up more than 7% at the time of writing.
"The US business cash burn has significantly been reduced, and we believe should improve further, and there is scope for renewed interest in M&A," wrote the analysts.
BofA also said that with UK and Ireland business now firmly in positive EBITDA territory, two of Just Eat's segments are now profitable.
"UK&I remains in very early days of profitability, and the full impact of the logistical base reset is yet to flow through," the analysts added. "The performance gap we had seen between Deliveroo (ROO) and TKWY in UK&I has shrunk, and now TKWY's performance is comparable to ROO."
"With a clear path of profitability improvement over 24E and 25E, TKWY looks undervalued at the current share price," they concluded.
What is the aggregate analyst price target on Just Eat? Find out with Investing Pro. For an extra 10% discount, use Coupon: Canada2024.
Don’t miss the New Year’s sale, for up to 60% off. Only until Jan 31.