Shares in the restaurant food delivery company have been battered following three profit warnings in 18 months. Credit Suisse (NYSE:CS.) believes the company could have made a better job of explaining why these profit warnings came about; coupled with the loss-making nature of the industry, the stock has most definitely not been flavour of the month.
Despite the impression given of a management team that does not know what is going on, Credit Suisse argues that strategy and execution have been strong. The group has invested more than any competitor to date in rapidly ramping up logistics and this has already improved its competitive positioning, according to the Swiss bank.
“We believe 1H21 can, as the group believes, be the period of peak investment. Whilst we accept uncertainty is high, we flag moving parts around: non-recurring marketing, rising service fees, delivery efficiencies, rising delivery fees and removal of fee caps. If this proves to be the case, we believe this could be an excellent time to own the shares,” Credit Suisse said even as it cut its target price to 10,500p from 11,000p.
Shares in Just Eat currently trade at 6,141p, up 40p on the day but down from the 2020 peak of 9,980p (in October).