FRANKFURT (dpa-AFX) - Shares in Delivery Hero continued their downward slide on Tuesday. The fact that the delivery service will permanently employ its drivers in Spain in order to avoid legal uncertainties pushed the share price down to its lowest level since the end of September in the afternoon. The shares also broke through the simple 90-day moving average, which is an important signal for the medium-term trend and currently stands at just under EUR 32.30, falling 8 percent to EUR 31.90.

The day before, Delivery Hero had already fallen by almost 11% due to news surrounding the legal dispute in Spain. However, after a share price rally from the end of July to the end of October, the stock is still up by around a third over the course of 2024.

This Tuesday, several analysts lowered their price targets, even though they continue to recommend the share as a buy. Among others, analyst Christian Salis from Hauck Aufhäuser Investment Banking cut his target for the share from 61 to 52 euros, citing the legal dispute between the subsidiary Glovo and the Spanish labor authorities as the reason. He referred to higher future costs for Spanish delivery service drivers as well as an increase in contingent liabilities for retroactive payments since 2021 and possible fines.

Analyst Clement Genelot from Bryan Garnier also wrote that Delivery Hero has probably changed its driver model in Spain, as the company is probably on the verge of losing in the lower courts in Spain. As this is likely to reduce operating profit for the financial year by 100 million euros, he reduced his price target from 52 to 49 euros.

"Any drift towards our worst-case scenario would clearly jeopardize our "buy" investment scenario," Genelot warned at the same time. This "worst case scenario" would occur if the company's activities in Taiwan were not sold and Delivery Hero also suffered a court defeat in Spain./ck/jsl/mis