[ad_1]
Following DoorDash ‘s latest earnings report, Bank of America sees its possible entry into the S & P 500 index as a potential near-term driver for shares in the food delivery stock. The 12-year-old, San Francisco-based DoorDash on Tuesday beat analysts’ fourth-quarter revenue expectations, according to FactSet. DoorDash was also profitable as measured by generally accepted accounting principles (GAAP) in the most recent quarter and the past four quarters in aggregate — two requirements for inclusion into the benchmark S & P 500. “Following a second quarter of GAAP profit ( & trailing four quarters GAAP profitable in aggregate), S & P inclusion could be a near-term catalyst for Doordash,” BofA analyst Michael McGovern wrote to clients in note on Wednesday. With those profitability hurdles cleared, DoorDash may soon be invited into the S & P 500 by S & P Dow Jones Indices, which decides who’s in and who’s out of the index. As precedent, McGovern pointed to Uber , whose entry into the S & P 500 was annouunced three weeks after it become eligible following third-quarter results in 2023. McGovern raised his price target by nearly 20%, or $40, to $245 on Wednesday, implying DoorDash can rally 27% from Monday’s close. The new price target is the highest on the Street, based on analysts polled by LSEG. BofA also reiterated its buy rating, in line with the majority of Wall Street analysts. DoorDash shares rose nearly 4% in early trading Wednesday, bringing its year-to-date advance to 18% and pushing the past year’s rally to 67%, according to FactSet data.
[ad_2]
Source link
