BofA raises DoorDash target on Home Depot partnership

Investing.com -- Bank of America raised its price target for DoorDash (NASDAQ: DASH) to $205 from $172 given its new partnership with Home Depot (NYSE: HD) and robust data on the company’s growth potential.

The collaboration will add over 2,000 Home Depot stores to DoorDash's platform, expanding its non-restaurant offerings, which already include over 115,000 stores and 2 million products.

BofA noted strong fourth data for the online restaurant sector, with aggregated credit and debit card spending showing growth at its fastest pace since Q4 2021. DoorDash outperformed its competitors, outpacing Uber (NYSE: UBER) by 3% and Instacart (NASDAQ: CART) by nearly 20% in Q4.

“Long term, we think that 3P app penetration of restaurant spend could increase from 7% to 16%, with DASH remaining the share leader,” analyst said. The brokerage reiterated its “Buy” rating on DoorDash.

BofA said its price target increase on DoorDash was based on a sum-of-the-parts valuation, reflecting projected improvements in restaurant EBITDA and expected growth in New Verticals gross order value. BofA applies an 18x 2026 restaurant EBITDA multiple, slightly higher than peers, and values New Verticals at a 1.0x GOV multiple, arriving at a $205 target.

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