Bank Of America Bullish On GrubHub Inc

Analysts at Bank of America initiated coverage on GrubHub Inc GRUB with a Buy rating and $47 price target on Friday.

Nat Schindler is expecting upside in GrubHub for the following reasons: 1) increasing use of smartphones for local transactions 2) Early penetration of the large total addressable market 3) Significant competitive barriers 4) profit margin expansion potential.

Furthermore, analysts believe the low diner penetration is the biggest upside driver as there is significant growth potential in this area given that only 2 percent of diner orders are through mobile or online, whereas 9 percent of restaurant orders are through mobile.

Shares of GrubHub closed Thursday at $38.47