On Wednesday, Citi analyst Monique Pollard upgraded Delivery Hero (DHER:GR) (OTC: DLVHF) stock rating from Sell to Neutral, while also reducing the price target from EUR26.00 to EUR23.50. The adjustment in the stock’s rating comes as a response to a combination of mixed application trends and the negative impact of updated foreign exchange rates.
Pollard’s analysis indicates a revision of future revenue and earnings estimates, with a forecasted reduction in fiscal years 2025 and 2026 revenues by 4% each. The adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) for fiscal year 2025 is now estimated at EUR969 million, which is a 1% decrease from previous expectations and sits below the consensus of EUR1,045 million. This figure also hovers at the lower end of the company’s guidance range of EUR975 million to EUR1,025 million.
The forecast for Delivery Hero’s Gross Merchandise Volume (GMV) growth in fiscal year 2025 is pegged at 9% on a constant currency basis, aligning with the company’s guidance of 8-10% excluding the effects of hyperinflation. Revenue growth is expected to be around 18% on a constant currency basis, which is within the guided range of 17-19%.
For the first quarter of 2025, Citi anticipates an 8% growth in GMV on a constant currency basis, which is slightly above the consensus of 7%. Growth is expected across all regions except Asia, where a decline in GMV of 14% is projected, or 10% on a constant currency basis.
The reduction in the price target to EUR23.50 from EUR26.00 is attributed to the foreign exchange impact on earnings forecasts and the performance of the Talabat share price. Despite the downgrade in the price target, the upgrade of the stock rating to Neutral from Sell reflects the stock’s price decline of 28% since February 18, 2025.
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