Proactive Investors - Deliveroo PLC (LON:ROO) shares pushed 2.6% higher to 125p on Thursday supported by positive comments from Bank of America (NYSE:BAC).
The broker reinstated coverage of the food delivery outfit with a 'buy' rating and price objective of 151p.
The bank pointed out the firm has outperformed in the UK & Ireland in recent years and continues to ramp up profits.
“We think that this growth should be sustainable, as its expansion into grocery leads to greater ad opportunities and further supports profitability expansion,” BofA said.
Further, early next year, the two-tier share structure should end, levelling the playing field in terms of voting rights for shareholders and acting as a potential catalyst, it believes.
“We argue that these positives and its strong UK&I positioning are not reflected in the current share price,” the broker added, with Deliveroo trading at c10x EV/Ebitda and 0.6x EV/sales for 2024 versus European peers at c10x and 0.7x, respectively.