German Stocks: Delivery Hero (DHER) Shares Fall on Antitrust Fine Fears

In the biggest news about German shares, DAX-listed company Delivery Hero SE (FROM: DHER) shares are down 5.5% at the time of writing, after the company revealed that it could be fined by the European Union (EU) for antitrust violations. The company further said that the fine could be in excess of €400 million. As a result, Delivery Hero now plans to increase the corresponding reserve amount from the previous amount of €186 million.

Delivery Hero is a global online food delivery company headquartered in Germany and operating in over 50 countries worldwide.

Delivery Hero Regulatory Issues

The possible fine Delivery Hero could face is for an anti-competitive agreement that included terms such as sharing domestic markets, exchanging confidential business data and agreements not to hire a competitor’s employees. In November 2023, the EU announced an investigation into allegations that online food delivery companies colluded with competitors. However, it did not mention Delivery Hero.

However, the company is preparing to face these penalties following surprise EU inspections in July 2022 and November 2023. These inspections were followed by the company’s recent informal talks with the EU and subsequent in-depth review.

The company also assured its full cooperation in the investigation.

Is Delivery Hero a good stock to buy?

Despite the investigations and potential fine, analysts remain bullish on Delivery Hero stock. Today, analysts from JP Morgan, UBS, and Barclays reaffirmed their Buy ratings on DHER stock, predicting 97%, 167%, and 152% upside potential, respectively.

On the other hand, analysts at Bernstein were not happy with this development. They believe it could delay the company’s path to positive free cash flow. With its Q1 results in April, Delivery Hero confirmed that it is on track to achieve positive free cash flow in fiscal 2024.

Overall, TipRanks analyst consensus rates DHER stock as Strong Buy. The stock has a total of 13 recommendations, three of which are Buy. Delivery Hero’s share price forecast is €44.76, implying a potential upside of 123% from current trading levels.

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