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Investing.com — Shares in Deliveroo Holdings PLC (LON:ROO) rose in early trading on Thursday after analysts at Credit Suisse upgraded their rating of the food delivery service to outperform from neutral.
The analysts argued that Deliveroo has an inexpensive valuation and the potential for increased share buybacks, calling the company an “unrewarded outperformer.”
They added that the group has shown its potential, particularly with regard to future profitability, throughout the 2022 financial year. The Credit Suisse analysts said Deliveroo’s balance sheet also remains strong, allowing the business to defend itself from takeover bids through share repurchases.
The comments come as Deliveroo is due to unveil its 2022 results on March 16. The group has said its annual core profit margin is now expected to be higher than its previous guidance after elevated prices and cost cuts helped ease the impact of a downturn in orders in the fourth quarter.
Meanwhile, Chief Executive Officer William Shu predicted in January that adjusted core income will improve in 2023 despite an “uncertain” economic outlook.
