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On Wednesday, Citi analysts issued a downgrade for Delivery Hero stock from Neutral to Sell, adjusting the price target to €26.00 from the previous €28.00. The revision reflects concerns over the company’s market position amid heightened competition, particularly in the Middle East and North Africa (MENA) region.
Monique Pollard of Citi expressed skepticism regarding Delivery Hero’s current market valuation, citing the aggressive expansion of Meituan-backed Keeta in Saudi Arabia. According to Pollard, Keeta’s strategy has been effective in capturing a significant share of traffic in the region. This development poses a threat to Delivery Hero’s long-term margin profile, especially in Saudi Arabia, which is one of its most profitable markets.
The report further anticipates potential risks as Meituan may expand into additional MENA markets in the 2025 to 2026 timeframe. Such a move could create additional growth headwinds for Delivery Hero, possibly leading to market share declines. This is a concern for the company even with the backdrop of an overall growing market.
Citi’s revised price target to €26.00 from €28.00 reflects the firm’s expectation that these competitive challenges will impact Delivery Hero’s financial performance. The downgrade to a Sell rating suggests that Citi analysts see more downside than upside potential in the stock at its current valuation.
Delivery Hero, which operates a global online food ordering and delivery service, has been facing increasing competition in various markets. The company’s stock price may be influenced by these latest analyst comments, as investors consider the potential implications of a more competitive landscape on the company’s future earnings and market share.
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