Jefferies names newest ‘Top Pick’, replacing Uber

Jefferies upgraded DoorDash, Inc. (NASDAQ:) to a Buy rating (From Hold), raising their 12-month price target on the food delivery platform to $130.00 (From $90.00) after choosing the company as a “Top Pick”, a spot previously held by Uber (NYSE:).

Jefferies predicts that DASH’s EBITDA will double within the next two years. This growth is anticipated due to increased advertising reach and improvements in the fundamental financial aspects of the business.

Insights from CART disclosures and discussions with industry contacts have bolstered the confidence of Jefferies’ analysts in the expansion of profit margins, especially in new sectors like grocery and convenience services. This confidence led to a revision in the estimated ’24/’25 EBITDA figures for DASH, now forecasted to be 12%/17% higher than the industry average.

Etsy (NASDAQ:) remains Jefferies’ “Top underperform” pick as analysts expect muted growth in GMS/EBITDA to pressure Etsy’s premium valuation, which currently sits at around 10% above the average valuation for internet platforms, despite experiencing EBITDA growth that is below the industry average.

“We expect continued normalization of transitory pandemic-related tailwinds to keep ETYS’s buyer churn-rate elevated and buyer spend pressured.” Added Jefferies

Shares of DASH and ETSY are up 3.66% and 0.48% respectively in pre-market trading Monday morning.