GrubHub Inc (GRUB) Stock Slips on Citi Downgrade
GrubHub Inc (NYSE:GRUB) stock took a hit today following a downgrade from analysts at Citigroup.
Source: Shutterstock
A note from Citigroup analysts explains that the firm has downgraded GrubHub Inc from a “Buy” rating to a “Neutral” one. It also says that it has a 12-month fair value target of $56 per share for GRUB stock. The stock was sitting at $54.11 when the markets closed on Wednesday.
Citigroup notes that the fair value target of $56 per share isn’t enough for GRUB stock to maintain its “Buy” rating at the firm, which is the cause for the downgrade. It also says that the recent increase in shares represents its near-term outlook.
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
The note from Citigroup also includes other reasons as to why the stock is dropping down to a “Neutral” rating. This includes too much hype concerning its purchase of Eat24 earlier this year. The firm states that investors are “overestimating” how much East24 will add to GRUB’s earnings, reports TheStreet.com.
GrubHub Inc stock has been on the rise the past few months, but there are still concerns about its place in the food-delivery market. More rivals continue to pop up in the market and GRUB may not be ready to handle the competition.
One of the big competitors that GrubHub Inc will have to deal with is online retail giant Amazon.com, Inc. (NASDAQ:AMZN). It recently teamed up with Olo for its Amazon Restaurant efforts. Olo is a startup with a focus on digital pay and ordering.
GRUB stock was down 3% as of Thursday morning, but is up 38% year-to-date.
More From InvestorPlace
As of this writing, William White did not hold a position in any of the aforementioned securities.
The post GrubHub Inc (GRUB) Stock Slips on Citi Downgrade appeared first on InvestorPlace.
