BUZZ-Delivery Hero rises after Barclays, MS upgrade to 'overweight'

** Shares in the German online takeaway food company Delivery Hero DHER.DE rise 4% in early Frankfurt trade after Barclays and Morgan Stanley reinstate coverage with "overweight"

** Despite concerns over recent newsflow, including 100 mln euro provisions from making Spanish riders employees, martial law in Korea and Taiwan's block of Foodpanda business sale to Uber, brokers see opportunity in sum-of-the-parts (SOTP) valuation

** When the Talabat lock-up expires, a distribution of Talabat shares to DHER shareholders could be a discussion point and potentially unlock value, Barclays says

** Barclays expects 80% of group's gross merchandise value to be EBITDA positive in 2025 at a country level, underpinning SOTP value

** Barclays expects group FCF to keep improving and become positive over time, adding there are other ways (e.g. asset sales) to reduce net debt

** Separately, both brokers initiate Talabat TALABAT.DU, in which DHER holds an 80% stake, with "overweight", saying the stock is underappreciated by the market

(Reporting by Amir Orusov and Anastasiia Kozlova)

((Amir.Orusov@thomsonreuters.com; Anastasiia.Kozlova@thomsonreuters.com))