On Wednesday, Jefferies analyst Giles Thorne resumed coverage on Just Eat Takeaway.com NV (TKWY:NA) (OTC: TKAYF), issuing a Buy rating with a price target of €22.50. The reinstatement of coverage follows the recent sale of Grubhub, which was finalized on January 7, 2025. The company, currently trading at $11.61, shows a "GOOD" overall financial health score according to InvestingPro analysis, with liquid assets exceeding short-term obligations. The transaction has led to adjustments in Jefferies' financial forecasts for Just Eat Takeaway.
According to Thorne, the sale of Grubhub results in an approximate 27% decrease in revenue and a 25% reduction in Adjusted EBITDA estimates for the fiscal years 2025 to 2027. Additionally, the firm's projections for share-based compensation have been reduced to around €80 million from the previous estimate of €170 million, with lease payments expected to decrease to about €50 million from €65 million across the forecast period. With the company's next earnings report due on February 26, investors can gain deeper insights into the post-Grubhub financial outlook through InvestingPro's comprehensive metrics and analysis tools.
Furthermore, the analyst has revised revenue and Adjusted EBITDA expectations for the company's Northern Europe operations, decreasing them by an average of 4% and 8%, respectively. On a more positive note, the UK and Ireland's FY25 EBITDA margins have been upgraded to 3% from the prior estimate of 2.5%.
The valuation of Just Eat Takeaway, according to Jefferies, remains supported by a Discounted Cash Flow (DCF) analysis, with the price target staying fixed at €22.50. Thorne pointed out that the changes driving the valuation are detailed in Exhibit 2 of their report. Currently, Just Eat Takeaway's enterprise value to estimated 2026 EBITDA ratio is approximately 4 times, which is lower compared to its European peers that trade on more than 5 times. The company appears undervalued based on InvestingPro's Fair Value analysis, with a moderate debt-to-equity ratio of 0.36 and a price-to-book ratio of 0.44, suggesting potential upside opportunity.
In other recent news, Just Eat Takeaway has been the subject of renewed focus from BofA Securities. The firm reinstated coverage on Just Eat Takeaway, issuing a Buy rating and setting a price target of €16.00. This decision follows Just Eat Takeaway's strategic divestiture of Grubhub, a move that BofA Securities views favorably. The sale of Grubhub is seen as a risk reduction measure for Just Eat Takeaway's balance sheet and a refocusing of the company's efforts on its Northern European operations. BofA Securities also noted Just Eat Takeaway's strong market position in the UK and potential for margin improvements through continued growth in logistics. BofA Securities' price objective suggests a 30% potential upside from Just Eat Takeaway's current share price. The firm's confidence in Just Eat Takeaway's market position and financial outlook underscores these recent developments.
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