Just Eat's Profitability On Track in H1 With Plenty of Catalysts Ahead; Shares Cheap

Just Eat Takeaway reported half-year 2022 results with total orders down 7%, flat gross transaction value, and revenue up 1%. North America was the main detractor with revenue down 5%, which was more than offset by European operations (Northern Europe up 6%, U.K. and Ireland up 10%, Southern Europe and ANZ up 6%). Adjusted EBITDA improved at the group level to minus EUR 134 million from minus EUR 189 million a year ago. More importantly, on guidance, management reiterated its outlook for fiscal 2022 (GTV growing by midsingle digits and adjusted EBITDA margin in the range of minus 0.5% to minus 0.7% of GTV versus 0.5% and minus 0.7% in our model respectively). Management also expects to reach positive adjusted EBITDA in 2023 at the group level (versus slightly positive in our model) and confirms long-term targets (in excess of EUR 30 billion of GTV added over the next five years and long-term group adjusted EBITDA margin in excess of 5% of GTV versus EUR 19 billion by 2026 and 4.3% by 2030 in our model). We maintain our EUR 81 fair value estimate for Just Eat and narrow moat rating. Guidance implies about 10% GTV growth and minus 0.3% of GTV adjusted EBITDA margin in the second half, which although higher than our estimates we view as achievable.