Yahoo Finance Market report: Just Eat falters as rival steps up to plate
Takeaway giant Just Eat was stuck in reverse gear after rival Deliveroo “parked its bicycles on the food delivery app’s lawn” by unveiling plans to make an ambitious land grab from the FTSE 100 firm.
Just Eat’s new boss Peter Plumb unveiled a frostily received plan in March to turbo-charge its expansion by creating its own delivery services to take on Deliveroo and Uber Eats.
Deliveroo has now countered Just Eat’s attempt to muscle in by launching “Marketplace+”, which will allow restaurants to sign up to the platform without using its delivery network. The move will lure 5,000 more restaurants to the platform in the UK, Deliveroo said.
“Deliveroo is parking its bicycles on Just Eat’s lawn,” warned Canaccord Genuity. Deliveroo’s “direct competitive response” to Just Eat’s expansion will lead to “high competition” and “higher uncertainty” for its larger listed rival, it warned.
With the race to cater for the UK’s fast-moving dining tastes heating up, Just Eat plunged to the bottom of the blue-chip index, reversing 40p to 810p, a 4.7pc slump.
Elsewhere, Boohoo.com’s post-trading update slide accelerated after its chief financial officer Neil Catto dumped a £3.3m stake and Barclays analysts stoked fears over its slowing core business.
While the Aim-quoted company’s PrettyLittleThing division is enjoying explosive growth, the Boohoo brand is “notably slowing” and “growth is getting harder”, Barclays warned.
The downgrade to “equalweight” nudged Boohoo shares lower in early trade but news of Mr Catto ditching 72pc of his Boohoo stake pushed the fast fashion e-tailer down to a 15.9p loss at 202.1p.
TalkTalk jumped 6.2p to 123.8p after Bank of America Merrill Lynch backed the troubled telecoms company’s “simplification” turnaround strategy.
In a double upgrade to “buy”, the Wall Street bank argued that focusing on a smaller product range can improve customer service and revenues. For the first time in four years, TalkTalk’s guidance is “achievable”, it told clients.
Market participants pinned a second day on the decline for clothing retailer Superdry on Ted Baker warning of challenging trading abroad. The FTSE 250 company, which has been stepping up its international presence, slipped 79p to £11.41.
Tate & Lyle dropped 27p to 643p on a downgrade to “hold” from Jefferies while BTG tumbled 12.5p to 542.5p, a 16-month low, on fears its PneumRX drug could fail to receive regulatory approval in the US.
Markets were subdued ahead of the Federal Reserve’s latest policy decision as traders awaited further clues on the pace of rate rises in the US. The FTSE 100 inched down 0.1 point to 7,703.71.
