Jefferies reduced Zomato’s price target by 18%
After Zomato’s shares more than doubled in value in 2024, analysts at Jefferies predict that 2025 could be a year of consolidation for the stock. Jefferies has adjusted its price target for Zomato by 18 percent to Rs 275 in light of this prediction.
While Jefferies acknowledges that Zomato’s valuations are reasonable given its strong performance and market potential, they are concerned about the increasing competition in the quick commerce sector. The brokerage warns that aggressive tactics from current players and new entrants could lead to higher discounting, posing a threat to Zomato’s profitability in the near future.
In addition to Blinkit, competitors like Swiggy’s Instamart, Zepto, Amazon, and others are actively vying for a piece of the quick commerce market. As a result, Jefferies has revised its EBITDA forecast for Blinkit and reduced its target multiple for the company.
Despite Jefferies’ caution, Morgan Stanley has maintained an overweight rating on Zomato with a price target of Rs 335. The brokerage views the quick commerce leader as a top pick in India’s internet sector, citing the company’s focus on profitability and growth potential.
Morgan Stanley expects it to achieve a 33 percent revenue CAGR over FY25-27, driven by its commitment to profitability and increasing user base. The firm is confident in Zomato’s ability to sustain profitability and attract more users.
On Monday, the shares closed 3 percent lower at Rs 264.85 on the NSE.
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