GrubHub Stock Jumps With Morgan Stanley Upgrade
GrubHub Inc (GRUB) - Get Report stock was up 3.5% Monday morning after Morgan Stanley analyst Brian Nowak upgraded the company to "overweight" from "equal weight."
Nowak said he sees GrubHub investors paying a higher multiple to gain exposure to the company's growing scale advantage. Online food delivery penetration is also poised to grow to as much as 10% from its current 6% level.
There's still pressure from Uber's UberEats and Amazon.com's (AMZN) - Get Report Amazon Restaurants, but GrubHub can buffer the impacts by utilizing its revenue base to scale faster, improve Ebitda and generate cash flows.
Nowak set a price target of $59 for the company, up from the previous $43 target and implying an 8% upside for the stock.
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