Competition increases in food delivery, Citi says as it cuts Delivery Hero

Citi flags an increasingly competitive landscape in the European food delivery sector, as new entrants such as Keeta and 99Food challenge established companies

It cuts Delivery Hero's DHER.DE rating to "sell" from "neutral", seeing increased competition from Meituan's 3690.HK Keeta platform in Middle East and North Africa, which will limit the German company's growth and margin in the region

The broker favours Just Eat Takeaway owner Prosus PRX.AS ("buy"), as it deems the Dutch technology investor's iFood business in Brazil well positioned to weather heightened competition

It also sees positive impacts from Prosus' 23% ownership of Tencent 0700.HK and from its AI investments and applications