Equities update: Netflix, Deliveroo, TSMC, Rentokil…

Delieveroo dishes up strong trading update after turning first profit

Mark Crouch, market analyst at investment platform eToro, says: “After finally turning a profit earlier this year, Deliveroo investors will have been egging the company on for more good news in this morning’s trading update. The online food delivery company has reported a slight uptick in online orders of 2%, while the value of orders has also edged higher year on year.

“Deliveroo has stayed committed to offering customers value and reliability during a period when food inflation threatened to eat away the company’s profit margins. They have also increased partnerships with more food outlets to expand their range offering while introducing a customer loyalty programme.

“Investors have endured a stomach-churning journey to get to this point. Following the short-lived success of Deliveroo’s IPO in 2021, the share price collapsed by 80%, raising questions as to whether Deliveroo could ever maintain a profitable business model in a post-lockdown world.  While the company is unlikely to see the same performance boom of the lockdown era, there are encouraging signs that the growth path the company is now on is much more robust and far less vulnerable to economic shocks.”

TSMC blows estimates out of the water

Adam Vettese, market analyst at investment platform eToro, says: “TSMC has reported a huge jump in profit this morning against a backdrop of already lofty expectations. The AI revolution is the momentum behind this performance amid huge demand for those chips. We only have to look at the share prices of two its biggest customers Apple and Nvidia, both of whom hit record highs in the last week, to see that huge demand for AI is evident by how much the money is flowing in. TSMC has already doubled investors’ money this year.

“Many might think they have missed the boat given these kind of moves but even at these levels TSMC is racing to expand infrastructure in order to keep up with demand.”

US struggles and lawsuits hampering Rentokil

Adam Vettese, market analyst at investment platform eToro, says: “America is still proving to be a tough nut to crack for Rentokil as they have reported that delayed synergies from their Terminix acquisition will push back profitability by 2-3 months. This is in addition to news earlier in the week that several lawsuits have been filed with allegations of securities fraud. The bad news week has certainly been reflected in the share price, though some of these losses have been pared this morning as the firm reiterated guidance.

“The company will look to continue its strategy of acquisitions as it strives to overcome these hurdles, but for shareholders, there is a lot of uncertainty at the moment.”