DoorDash stock could surge thanks to moderating food inflation and market share gains, according to Mizuho Securities. The firm upgraded the food delivery stock to buy from neutral in a Sunday note, with a new $105 per share price target up from $90 per share. Mizuho’s forecast implies about 30% upside from Friday’s $80.83 close. DoorDash stock has surged nearly 66% from the start of the year. DASH YTD mountain DoorDash stock has added more than 65% from the start of the year. Analyst James Lee says DoorDash should surpass Wall Street forecasts in the second half of 2023, driven by a solid market share amongst peers and stronger consumer food spending. “We believe key drivers include continued market share gains from its category-leading position in the US, and rational competition in Europe,” Lee said. “In conjunction, moderated food inflation and resilient consumer spending provide incremental support to our view.” Lee added that DoorDash’s current 15 times fiscal-year 2025 earnings is cheap compared to the company’s growth prospects from 2023 into 2024. “We believe DASH’s valuation, at 15x FY25/EBITDA, does not reflect the potential for high-teens growth exiting FY23 and into FY24,” he said. — CNBC’s Michael Bloom contributed to this report.
Original news source Credit: www.cnbc.com
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