Deliveroo’s Drone Delivery Trials: Balancing Innovation with Market Uncertainties

Luke Holbrook, an analyst from Morgan Stanley, maintained the Hold rating on Deliveroo plc Class A (ROO – Research Report). The associated price target remains the same with p180.00.

Luke Holbrook has given his Hold rating due to a combination of factors surrounding Deliveroo’s strategic initiatives and market conditions. The company’s recent move to trial drone deliveries in Dublin in partnership with Manna, a drone delivery startup, indicates an innovative step towards enhancing delivery efficiency and reducing costs. However, while this technological adoption could potentially streamline operations, it is still in the trial phase and its impact on Deliveroo’s overall performance remains uncertain.
Furthermore, the competitive landscape is intense, with key players like Alphabet’s Wing and Amazon Prime Air also advancing in the drone delivery space. Although Europe, including Deliveroo’s market, is ahead in regulatory terms, the competition and the nascent stage of drone delivery technology contribute to the cautious outlook. Thus, the Hold rating reflects a balanced view, acknowledging the potential benefits of innovation while considering the uncertainties and competitive pressures.