By Michael Dabaie
DoorDash Inc. shares were down 3% to $138.50 in afternoon trading.
Analysts initiated coverage of the food delivery and logistics company following its recent initial public offering.
J.P. Morgan initiated coverage at Neutral with a $160 price target.
"Overall, we are positive on DASH's value proposition and execution, but we believe the risk/reward in DASH shares is balanced at current levels," the note said.
J.P. Morgan said in its analyst note that the pandemic significantly accelerated consumer adoption of food delivery in 2020, with DoorDash seeing 200% year-over-year growth in total orders and gross order volume and positive adjusted earnings before interest, taxes, depreciation, and amortization.
"COVID-19 restrictions remain in place entering 2021 but should ease in 2Q/3Q, and we recognize that DoorDash will face very difficult comps. Growth will slow, but we also believe food delivery is a forever-changed category and activity will remain elevated as consumers continue to value convenience and selection, and restaurants continue to value the incremental revenue stream," the note said.
UBS initiated shares at Neutral with a $150 price target.
"Our Neutral rating is more a reflection of how future growth/margins appear increasingly priced in at current levels vs. global peers," UBS said in its analyst note.
Mizuho Securities USA initiated the stock at Neutral and price target of $155.
"Although competition is intense, we can expect to see rationalization over the next few years due to consolidation and industry players seeking profitability, if we use China as a proxy. That said, we expect DASH to maintain its dominant market share and estimate [gross order value] to grow nearly 6x over the next four years," Mizuho said.
Needhan initiated coverage at Buy rating with a $200 price target as it sees the company as one of the leaders in the burgeoning last-mile delivery market accelerated by Covid. "We believe DASH's dominance of restaurants gives it both a moat and a differentiated Trojan horse to expand into other categories, which is underappreciated," Needhan said.
The firm said its restaurant channel checks suggest DoorDash is gaining share in New York City.
Write to Michael Dabaie at email@example.com
(END) Dow Jones Newswires