Deliveroo (LON: ROO) shares are down more than 2% in early Thursday trading after the stock was downgraded by analysts at Bernstein.

The firm lowered its rating for the online food delivery company to Market Perform from Outperform, cutting the price target to 150p, down from 170p per share.

Analysts at the firm noted the company’s slower growth outlook into fiscal 2024 and further, combined with more difficult profitability inflection due to the scale of the business, as reasons for the downgrade.

In addition, they state that the next catalysts for the stock will likely be negative ahead of the expiry of the dual-class share structure in March 2024.

Deliveroo shares are currently trading around the 136p mark. However, the stock has had a solid year, up 61% in 2023, breaking out from a previous range.

Overall, analysts are neutral on the stock, with five out of six assigning ROO a Hold rating and one a Buy. The average price target is 134.50p.

By Sam Boughedda