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Morgan Stanley’s Top 4 Internet Stocks for 2017

PART:
1 2 3 4 5
Part 3
Morgan Stanley’s Top 4 Internet Stocks for 2017 PART 3 OF 5

Why Morgan Stanley Is Bullish on GrubHub

Morgan Stanley on GrubHub

Morgan Stanley (MS) included GrubHub (GRUB) in its top four Internet stock picks. The technology stock mainly provides a mobile and online platform for restaurant bookings and delivery orders in the US (SPY) (QQQ).

Why Morgan Stanley Is Bullish on GrubHub

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Morgan Stanley wrote, “We are bullish [on] GRUB … as our Google trends [search] analysis shows that GRUB’s Tier 2 [cities] ad efforts are increasing awareness.” 

As the uses of the Internet are growing day by day, the online advertisement business is also gaining strength. Companies that provide online platforms for various applications are gaining revenues from this advertisement business, which led Morgan Stanley to state that it is bullish on GRUB. 

Morgan Stanley expects a target price of $43.00 for GRUB and gave the stock an “overweight” rating. The investment firm expects a 24% upside for GRUB from its April 21, 2017, closing price of $34.61.

GrubHub’s performance

GrubHub (GRUB) is currently trading at $35.00. Its 52-week high is $44.58, and its 52-week low is $21.41. On a YTD (year-to-date) basis, the stock returned -5.5% on April 26, 2017. The stock has returned -14.3% over the last two years. It is currently trading at high price-to-earnings multiples.

The Technology Select Sector SPDR ETF (XLK), which tracks the performance of the technology sector, returned nearly 10.7% on a YTD basis on April 26, 2017. The broader market S&P 500 Index (SPY) (QQQ) returned 5.7% during the same period.

In the next part of this series, we’ll analyze Morgan Stanley’s view on Facebook (FB).

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