Investing.com -- Citi analysts upgraded Delivery Hero AG (ETR:DHER) to Neutral from Sell and updated its estimates to reflect the mixed trends in the food delivery sector and the negative impact of updated foreign exchange (FX) rates.
The upgrade follows a 28% drop in Delivery Hero’s shares since February 18.
Citi’s revised forecasts include a 4% decrease in revenue expectations for fiscal years 2025 (FY25) and 2026.
Moreover, the bank’s adjusted EBITDA estimate for FY25 is now set at €969 million, which is slightly below the consensus of €1,045 million and the lower end of the company’s guidance range of €975-€1,025 million.
The analysts project a Gross Merchandise Volume (GMV) growth of 9% in constant currency for FY25, aligning with Delivery Hero’s guidance of an 8-10% increase excluding hyperinflation.
Revenue growth is estimated to be 18% in constant currency, which is within the company’s forecasted range of 17-19%.
For the first quarter of FY25, Citi expects an 8% GMV growth in constant currency, slightly above the consensus of 7%.
Growth is anticipated across all regions except Asia, where a decline of 14% in GMV is expected, or 10% when adjusted for currency changes.
The analysts also adjusted their Delivery Hero price target to €23.50 from €26, citing “the FX impact on our earnings forecasts” and the challenges faced by Talabat, a subsidiary of Delivery Hero, as indicated by its share price performance.
Citi’s update to its estimates comes after observing mixed Q1 trends across delivery apps and web platforms. The latest data suggests that first-quarter results are likely to come in slightly weaker than previously expected.