Shares of GrubHub Inc. surged 4.5% in premarket trade Friday, after Morgan Stanley turned bullish on the online food-ordering company, citing faster diner growth as a result of accelerating restaurant additions. Analyst Brian Nowak raised his rating to overweight, after being at equal weight since May 2016. He raised his stock price target to $44, which is 18% above Thursday’s closing price of $37.37, from $36. “In our view, active diner growth–a sign of GRUB’s ability to bring on new users–and gross food sales per active diner–measuring GRUB’s ability to grow share of stomach–remain the two most important metrics in evaluating the health of GRUB’s business,” Nowak wrote in a note to clients. “We see bullish indicators in both of these, which are likely to lead to higher earnings power and upward revisions.” The stock has dropped 9.3% over the past three months through Thursday, while the Amplify Online Retail ETF has gained 2.7% and the S&P 500 has tacked on 6.5%.
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