2023-07-31 13:17:53 ET
DoorDash ( NYSE: DASH ) traded higher as JMP increased earnings estimates ahead of second-quarter earnings. Mizuho also raised its price target on the stock.
DASH rose 2% on Monday. The delivery company reports results on Wednesday after the close.
JMP said it increased its 2024 EBITDA estimate by 10% on “increased confidence” that new verticals are maturing. In addition, third-party app engagement suggests the growth of daily active users accelerated.
The firm maintained its Market Outperform rating and $100 price target, while acknowledging a softening U.S. consumer and a run in shares since the company reported first-quarter earnings.
“DoorDash continues to take share of the food delivery market (from Grubhub) while the company's increased focus on new verticals gives us confidence these categories can further scale,” JMP analysts led by Andrew Boone wrote in a note.
“With healthy industry competitive dynamics and new vertical and international investments maturing, we think profitability can surprise to the upside into 2024 as we continue to have a positive view of shares.”
Inflation in the U.S. has been moderating, though it’s still above the Federal Reserve’s target of 2%, and consumer spending picked up last month, signaling the strength of U.S. pocketbooks.
Mizuho ups price target
Mizuho increased its price target to $85 from $75 saying, “profitability remains favorable from increased Dasher supply, rational competition, and lower COGS.” The firm maintained a Neutral rating citing the stock’s premium valuation.
The Japanese bank sees resilience in consumer spending and share gains, as well as improved user engagement from moderating inflation, and consumer behavior that normalizes and engagement that increases as food inflation moderates.
“Concurrently, we expect customer acquisition costs to maintain at a low level due to a rationally competitive environment,” Mizuho analysts led by James Lee wrote in a note.
Shares are up nearly 89% year-to-date compared to Uber Technologies ( UBER ) up 92% and Just Eat Takeaway.com N.V. ( OTCPK:JTKWY ) down almost 21% .
More on DASH:
- DoorDash: Undervalued Even After A Massive Rally
- DoorDash names new board member as shares rally on
- DoorDash, Uber Eats and Grubhub battle New York City over minimum wage law
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DoorDash rises as JPM bumps estimates, Mizuho ups PT