- RBC Capital analyst Brad Erickson downgraded DoorDash Inc DASH from Outperform to Sector Perform rating and lowered the price target from $70 to $60.
- Though DoorDash’s execution & management are widely considered the class of the sector, as 2023 dawns, the analyst is uncomfortable with a potentially unfavorable risk/reward given likely hypersensitivity to order deceleration.
- Also Read: DoorDash Expects $85M In Charges Related To Job Cuts
- Erickson thinks the combination of evident slowing core order growth, limited EBITDA downside support, and Uber Technologies, Inc. UBER competing better in Manhattan as a proxy has prompted him to downgrade the stock.
- The analyst’s latest Manhattan restaurant checks using his proprietary indexed ranking system found noteworthy p/p improvement by Uber in terms of relative order volumes versus Just Eat Takeaway.Com N.V. JTKWY subsidiary Grubhub & DoorDash.
- He thinks Uber’s loyalty plan & strong suburb awareness may be at least partial contributors and indicates Uber is on the brink of taking over the number one share from Grubhub in Manhattan.
- Erickson thinks he could be wrong if the core U.S. restaurant marketplace reaccelerates back to mid to high-teens and if management cuts significant portions of loss-making efforts further driving more material upside to EBITDA estimates.
- Also Read: DoorDash Launches Self-Serve Ad Solutions For CPG Brands
- Price Action: DASH shares are trading lower by 2.56% at $55.66 on the last check Friday.
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