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On Thursday, Jefferies analysts adjusted their stance on Deliveroo Holdings PLC (LON:ROO:LN) (OTC: DROOF), downgrading the company’s stock rating from Buy to Hold. The decision comes in response to the recent developments surrounding a takeover offer from DoorDash (NASDAQ:DASH). Alongside the downgrade, Jefferies has set a new price target for Deliveroo (OTC:DROOF) shares at £1.80, a decrease from the previous target of £2.25. The food delivery company, currently valued at $3.38 billion, has seen its stock surge nearly 50% year-to-date according to InvestingPro data.
The change in rating and price target by Jefferies is a direct reaction to DoorDash’s announcement on Tuesday of a recommended final offer to acquire Deliveroo at 180 pence per share. This offer appears to have a high likelihood of success and has influenced market expectations regarding Deliveroo’s share valuation. InvestingPro analysis indicates the stock is trading near its 52-week high, with technical indicators suggesting overbought conditions. Subscribers can access 11 additional ProTips and comprehensive valuation metrics for deeper insights.
In a statement regarding the downgrade, Jefferies cited the offer price as the primary reason for adjusting the price target, indicating that the firm’s valuation now aligns with the proposed acquisition terms. "Given the price action and high probability of a successful takeover of Deliveroo by DoorDash following the latter’s announcement of a recommended final offer of 180p per share on Tuesday, we move our price target to the offer price and downgrade to Hold," said the Jefferies analyst.
Deliveroo’s stock movement in the upcoming period is expected to be closely tied to the progression of the DoorDash takeover deal. With the offer price now serving as a benchmark for Deliveroo’s share value, investors and market watchers will be monitoring the situation for any further developments.
The takeover bid by DoorDash is a significant event for Deliveroo and its shareholders, as it could potentially reshape the competitive landscape of the food delivery industry. Deliveroo’s response to the offer and the outcome of any negotiations will be pivotal in determining the company’s future direction. With annual revenues of $2.59 billion and a "GOOD" Financial Health Score according to InvestingPro, the company maintains strong fundamentals. Investors seeking detailed analysis can access Deliveroo’s comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Deliveroo Holdings PLC has been at the center of significant developments. Deutsche Bank (ETR:DBKGn) downgraded Deliveroo’s stock rating from Buy to Hold, raising the price target to GBP1.80 following DoorDash’s recommended cash offer of 180p per share. This offer represents a 23% premium over Deliveroo’s share price on April 25, 2025, and has been endorsed by Deliveroo’s Independent (LON:IOG) Committee. Similarly, Morgan Stanley (NYSE:MS) adjusted its rating from Overweight to Equalweight, also setting a price target of GBP1.80, reflecting the premium offered by DoorDash. Kepler Cheuvreux initiated coverage with a Reduce rating, citing competitive pressures and setting a price target at £1.56. The firm highlighted concerns over Deliveroo’s future amid increasing competition, notably from Meituan and the recent takeover bid for competitor JET by Prosus (OTC:PROSF). Deliveroo confirmed receiving DoorDash’s indicative proposal, with key shareholders expressing support for the acquisition. These recent developments indicate a period of strategic evaluation for Deliveroo as it navigates the potential acquisition by DoorDash.
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