Shares of GrubHub Inc. surged 5.2% toward a more-than two-year high in morning trade Monday, after Wedbush Securities suggested the online food-ordering company may be Amazon.com Inc.'s next takeover target, following the Whole Foods Market Inc. deal. With Amazon's focus now "squarely on food delivery," analyst Aaron Turner said he believes there is a "sound" rationale for Amazon to buy GrubHub. He said Amazon has already tried to launch its restaurant delivery business with Restaurants, with little success. "The company has been unable to capture any significant user traction and restaurant acquisition has been lackluster," Turner wrote in a note to clients. "During the same time, [GrubHub] has successfully expanded into new markets, reaccelerated user and revenue growth and is rapidly scaling its delivery infrastructure." He reiterated his outperform rating on GrubHub and his stock price target of $50, which would imply a market capitalization of $4.31 billion. The stock has run up 21% year to date, while the S&P 500 has gained 9.4%.
Continue Reading Below
Copyright © 2017 MarketWatch, Inc.