Goldman Sachs has taken the decision to downgrade Prosus and Naspers to 'neutral', citing a price war in Brazil's food delivery market. The move comes as iFood, a dominant player in the market, faces increased competition from rival delivery services.
iFood, which is owned by Prosus, is the largest food delivery company in Brazil and has faced intense competition from rival services such as Rappi and Bala. The company's market share has been impacted as a result, with Goldman Sachs citing a 'price war' as a key factor in the downgrade.
The downgrade could have a significant impact on Prosus and Naspers' share prices, with investors set to watch the situation closely. Prosus and Naspers have already seen their share prices fall in recent months, due in part to concerns over the impact of the price war on iFood's market share.
Goldman Sachs has maintained an 'outperform' rating on the stocks of rival food delivery companies, including Just Eat Takeaway and Deliveroo. The bank has cited the companies' strong growth prospects and ability to navigate the increasingly competitive market.
The downgrade has been met with a mixed reaction from investors, with some calling for a more cautious approach to the stocks. However, others have noted that the downgrade is a reflection of the increasingly competitive nature of the food delivery market, and that Prosus and Naspers may still hold long-term potential.