On Wednesday, RBC (TSX:RY) Capital adjusted its outlook on Delivery Hero SE (DHER:GR) (OTC: DLVHF) shares, reducing the price target to €45.00 from the previous €63.00 while still recommending the stock as an outperform. The revision reflects a response to recent share price declines driven by concerns over heightened competition in the market.
The firm believes the lower share price presents an attractive entry point for investors interested in Delivery Hero's long-term potential. RBC Capital's confidence in the company stems from its strong brand, solid partnerships with restaurants, comprehensive own-delivery network, and competitive offerings. These factors are seen as critical for Delivery Hero in maintaining its market position amidst a challenging environment.
RBC Capital's analysis of app data further bolsters this outlook, suggesting that Delivery Hero's increased investments are yielding positive results. The company's strategy to prioritize long-term market leadership over short-term profitability is considered prudent, indicating a focus on sustainable growth.
While the decreased price target may reflect a more cautious short-term stance, the reiteration of the outperform rating signals a belief in Delivery Hero's strategic initiatives and its ability to overcome current market hurdles. The company's efforts to adapt and invest in its business model are recognized as steps towards reinforcing its standing in the competitive delivery services landscape.
Investors and market watchers will continue to monitor Delivery Hero's performance, particularly in light of the company's strategic investments and the competitive pressures that prompted the price target revision by RBC Capital.
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