Morgan Stanley lifts Jubilant Foodworks stock to Overweight

Published 31/01/2025, 09:26
Morgan Stanley lifts Jubilant Foodworks stock to Overweight

On Friday, Morgan Stanley (NYSE:MS) raised its rating on Jubilant Foodworks Ltd (NSE:JUBI:IN) stock from Equalweight to Overweight, while also increasing the price target to INR781.00 from the previous INR620.00. The upgrade comes after the company demonstrated stronger than expected growth in recent quarters, despite a period of generally weak growth in the Quick Service Restaurant (QSR) sector.

The firm noted several positive developments at Jubilant Foodworks, including a noticeable uptick in order growth. This change in momentum follows a period of six consecutive quarters of sluggish trends. According to Morgan Stanley, the company’s recent management initiatives have played a significant role in turning around its performance. These initiatives include a focus on seven key regions, ongoing product and service innovation, and the elimination of delivery charges.

These strategic and tactical measures are believed to have not only brought Jubilant Foodworks back on a growth trajectory but also positioned it ahead of its competitors in the industry. The firm highlighted that the growth in new customer acquisition and the delivery channel began to accelerate from the fourth quarter of the fiscal year 2024, leading to a rise in new orders in the first quarter of fiscal year 2025. Furthermore, same-store sales saw a sharp rebound in the third quarter of fiscal year 2025, which also benefited from some base effect advantages.

Morgan Stanley’s analysis suggests that the company’s improved performance is likely to sustain, especially if urban market trends continue to improve. The upgrade in the stock rating and price target reflects the firm’s confidence in Jubilant Foodworks’ potential for steady future growth, driven by the company’s strategic adjustments and market adaptations.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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