DoorDash stock surges toward a record, after BofA analyst raises target to a Street high $255

Shares of DoorDash Inc. ran up 5.5% in midday trading Thursday, putting them on track for a record close, after BofA Securities analyst Michael McGovern turned bullish, saying the food-delivery app is succeeding in a growing market for non-restaurant deliveries. McGovern raised his rating to buy from neutral, and boosted his price target to $255 from $190. The new target is now the highest of the 21 analysts surveyed by FactSet. "We expect non-restaurant ordering to help mitigate much of the post-pandemic drop in restaurant ordering, with numerous new partnerships underscoring DoorDash's strong position in the sector," McGovern wrote in a note to clients. "From 2021 to 2026, we expect online penetration of grocery, convenience and alcohol spending to increase from 8% in 2021 to 16%, and expect non-food applicable retail to increase from 2% to 10%." The stock, which went public in December 2020 at an IPO price of $102, had closed at a low of $112.99 on May 12, amid concerns over how its employees would be classified, increasing competition and worries over the impact of fading COVID-19 concerns. Since then, the stock has rocketed 96.0% as COVID-19 cases spiked. Over the same time, the S&P 500 has gained 9.6%.

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