JP Morgan Cazenove reckons the investment case for Deliveroo (LON:ROO) has “improved significantly” over recent weeks.
However, that improvement doesn’t seem to have been enough to shift the heavyweight London broker away from its ‘neutral’ recommendation.
It cited the resolution of issues around rider regulation, the stake building by rival Delivery Hero (ETR:DHER, OTCQX:DLVHF) (which now has 5% of ROO) and better than expected trading momentum for its more upbeat assessment of prospects.
JPMC values the stock at 393p, up from 337p previously, which is a modest premium to the current price of 376p.
Tweaking its spreadsheet after the food delivery group’s maiden set of results, the broker raised its full-year 2021 and ’22 gross transaction value (GTV) estimates by 3% and 6% respectively.
This implies total growth for the current year will be 59%, which JPMC noted was at the top end of guidance, while the following year it will slow to 30%.