Just Eat the pick of 'most attractive subsector' in Europe - Credit Suisse

Analysts at Credit Suisse perused the menu of the online takeaway sector, clicking on Just Eat as its favourite dish.

The Swiss bank initiated coverage on the likes of Delivery Hero with an 'outperform' rating and Takeaway.com as 'neutral' at the same time as reiterating its 'outperform' rating on Just Eat.

Just 15% of orders are being made online at present in these particular company's geographies, offering plenty of room to grow market share and reduce costs in "a demonstratable way".

Overall, the analysts forecast a 2017-20 revenue compound annual growth rate of 29% across its online takeaway coverage versus the European internet sector at 10%.

"This growth comes alongside industry-leading margins of 60% and attractive cash dynamics," the analysts wrote while referring to the online takeaway sector as the "most attractive subsector in Euro internet."

Credit Suisse initiated coverage on Delivery Hero with a target price of €44 per share, while Takeaway.com was targetted at €51 a share, but it was Just Eat that stood out the most as far as its analysts were concerned.

"Delivery Hero with its vast addressable market, early structural adoption and fierce competition is, in our view, an attractive higher risk, higher reward play," Credit Suisse said.

"However, Just Eat remains our top outperform as a more balanced, proven play. Takeaway with limited addressable market in countries with strong competitive positions is our least favoured play and we see it as fairly valued."

Besides the reiteration, the analysts upped their target price on Just Eat to 1,050p from 870p.

As of 1200 GMT, shares had declined 1.71% to 851.80p.