HelloFresh Shares Surge After Goldman Sachs Analysts Reiterate Rating

By Scott Kanowsky

Shares in HelloFresh SE experienced a significant rise on Tuesday, placing them among the top performers in the pan-European market, following a favorable assessment by analysts at Goldman Sachs.

In their recent communication to clients, the analysts maintained their "Buy" rating for the meal kit delivery service, citing an "attractive risk/reward dynamic" at its current valuation. They emphasized that the company’s loyal customer base, which frequently pays full prices, often goes unnoticed, and this contributes positively by helping to balance the losses associated with discounts provided to new customers.

The analysis from Goldman Sachs highlighted that, despite increased costs tied to customer acquisition, the profitability per existing customer has shown year-on-year improvement throughout 2022.

Goldman Sachs has set a price target of €44 for HelloFresh, a figure that would represent nearly a 100% increase from its current trading price of just above €22. However, the shares of the Berlin-based firm still face a considerable challenge in recovering from a steep decline experienced last year, which resulted in a loss of approximately two-thirds of their value.

Investor interest surged during mid-morning trading, with trading volumes exceeding the 20-day average for that time.

In line with HelloFresh’s gains, shares of its closest competitors, including Just Eat Takeaway and Delivery Hero AG, also rose. These companies, like HelloFresh, faced substantial declines in 2022 due to a post-pandemic demand slowdown, rising inflation costs, and ongoing supply chain issues.