On Friday, DoorDash (NASDAQ:DASH) received an updated stock rating from Piper Sandler, shifting from Underweight to Neutral. The firm has also set a new price target for DoorDash shares at $127.
Piper Sandler's decision to upgrade DoorDash's rating follows observations of the company's strong management execution. Despite concerns about the delivery service's potential vulnerability in an economic downturn, the firm acknowledged that consumer food delivery habits established during the COVID-19 pandemic have persisted into the post-pandemic period.
The analysis by analysts included a valuation assessment, noting that DoorDash is the most expensive stock within its peer group when evaluated on a GAAP (Generally Accepted Accounting Principles) basis, based on expected 2025 Price to Earnings (P/E) ratio. This valuation implies that the market has already factored in much of the company's potential positive developments.
In establishing the new price target, analysts utilized a Discounted Cash Flow (DCF) model, which resulted in the $127 figure. The change to a Neutral rating indicates a shift in the firm's stance, suggesting that the previous Underweight rating is no longer justified given the current status and outlook of DoorDash.