Just Eat Makes Strong Gains

Just Eat helped the FTSE 100 climb to a new record high on Thursday, after Barclays informed investors that it thought that the forthcoming ban on credit card transaction fees might end up boosting profitability.

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shareprices.com - Friday, January 12, 2018

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Barclays

The website, which offers takeaway ordering services across the country, has been facing increasing pressure after it introduced a 50p surcharge on all UK orders, to counteract the card fee ban. Previously, the group charged a 50p card processing fee to the restaurant, rather than billing the consumer.

For most customers, there will be little difference, as restaurants often passed on the fee at checkout, but since almost one third of Just Eat orders are paid in cash, the levy could potentially generate £15 million in additional revenue for the company, which would mean that their 2018 results would be well ahead of consensus expectations. Barclays also added that Just Eat’s 32 percent stake in a Brazilian joint venture has been overlooked by the market. The venture is already bigger, in terms of order valuations, than the UK’s business was back in 2014, and Barclays believes that Just Eat’s stock is worthy of a £10 valuation. The company closed up by 4.7 percent, at 803.8p.

In other news, EasyJet helped to lead Airlines higher, thanks to a UBS consumer survey, which found that there were no signs of a slowdown in terms of consumer ticket spending in the UK. UBS have kept their “buy” rating for Easyjet, and also upgraded Ryanair to a “buy” rating.

 

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