Just Eat downgraded to 'equal weight' at Barclays

Analysts at Barclays downgraded online food ordering and delivery service Just Eat to 'equal weight' on Thursday, citing limited upside to their 785p target price on the back of slower growth and heightened competition.

Barclays said it was "slightly concerned" by Just Eat's weak fourth-quarter order growth in the UK, which the bank seems to think suggests just 6-7% organic growth with the marketplace grinding to a halt.

Furthermore, weather only had a limited impact on Just Eat's performance, they said, explaining that competition also appeared to have "stepped up".

"In Feb, Uber Eats cut its fees for merchants and it will sponsor Love Island. These events have happened after the FY, but we believe are clear anecdotal evidence that Uber is becoming more aggressive in '19 in the UK, which remains ~90% of group EBITDA," Barclays pointed out.

On a cheerier note, upside risks were present in the form of a break-up, as suggested by activist shareholder Cat Rock, and they saw potential merit in such a move.

"The industry has relatively quickly consolidated; we anticipate that this will continue and JE has assets which we believe could be non-core, which include LATAM and ANZ."

Barclays made only minor changes to its headline estimates but maintained its 785p target price.