Morgan Stanley Downgrades GrubHub (GRUB) to Equalweight; 'The Amazon Effect'

Morgan Stanley downgraded GrubHub Inc. (NYSE: GRUB) from Overweight to Equalweight with a price target of $43.00 (from $47.00).

Analyst Brian Nowak says his teams AlphaWise analysis yields data points pointing toward growing awareness and adoption of Amazon's (NASDAQ: AMZN) Amazon Restaurants and other online platforms which he believes will bring pressure to GRUB customer acquisition costs and profitability.

According to the data, 26% of Amazon Prime members reported having tried Amazon Restaurants in the past 6 months and they model Amazon's restaurant business to reach ~$5B of gross food sales by 2022.

He further comments "We note our Alphawise data show UberEats is gaining traction too with a 800bp increase in user adoption (now at 10%). Our Amazon Restaurant Delivery math also shows how a scaled restaurants business could subsidize 1-hour PrimeNow Delivery."

For an analyst ratings summary and ratings history on GrubHub Inc. click here. For more ratings news on GrubHub Inc. click here.

Shares of GrubHub Inc. closed at $47.70 Friday.

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