Deliveroo’s Mixed Performance and Uncertainty Lead to Hold Rating

Analyst Luke Holbrook of Morgan Stanley maintained a Hold rating on Deliveroo plc Class A, retaining the price target of p180.00.

Luke Holbrook has given his Hold rating due to a combination of factors impacting Deliveroo plc Class A. The company reported an 8% year-over-year increase in orders for the first half of the year, indicating consumer resilience, with growth accelerating from the first to the second quarter. However, despite this positive order growth, Deliveroo’s gross profit margins were slightly below expectations, although they managed to control marketing and overhead expenses.
Furthermore, Deliveroo’s adjusted EBITDA exceeded consensus expectations by 14%, but the full-year guidance suggests a potential decrease in the second half due to increased investments. While the UAE and Italy remain strong markets, France continues to show softness. Additionally, the ongoing regulatory approval process for the acquisition by DoorDash adds a layer of uncertainty, which contributes to the Hold rating as investors await further developments.

According to TipRanks, Holbrook is ranked #1609 out of 9893 analysts.