With the announcement last week that Grubhub has agreed to be acquired by Amsterdam-based Just Eat Takeaway (TKAYY), Uber Technologies (UBER) shares hit the skids. As was widely reported, Uber itself had been in serious talks to buy Grubhub, which combined with its own Uber Eats unit would have vaulted the company to the front of the pack in the U.S. food delivery business. But the two sides couldn’t agree to terms.

Instead of industry consolidation, Grubhub (GRUB) gets new, deeper pockets for its battle for market share with Uber Eats, DoorDash and Postmates. Adding gasoline to the fire, DoorDash is in talks for a new round of financing that will boost its valuation to $15 billion – and give it more ammo in the battle for market share in the already competitive market.

SunTrust Robinson Humphrey analyst Youssef Squali asserts Monday that Uber will survive and thrive despite the disappointing developments.

“Uber’s failure to acquire GrubHub and DoorDash’s pending financing … are net negatives for Uber Eats short-term, as they signal prospects for intensifying competition, rather than consolidation of the U.S. food delivery segment around fewer players as many had anticipated,” he writes in a research note. But Squali remains an Uber bull, repeating his Buy rating and $50 price target, and noting that there are other potential M&A targets for Uber.

“We liked the prospects of an Uber/Grub merger, given that consolidation would have improved the competitive intensity, and Grub’s greater restaurant supply would have been a very good complement to Uber’s more developed delivery network,” he writes. “That said, by no means did we feel that Uber needed to buy this asset to be successful longer-term. We believe the Uber brand, its leading position in ridesharing, and platform approach gives the company an advantage in acquiring customers … While Grub may have bigger supply in certain markets today, we believe this advantage may erode over time as supply follows consumer demand.”

Squali sees little chance that Uber will buy DoorDash—the valuation likely makes it a nonstarter. But he sees other potential targets, in particular he points to Postmates and GoPuff.

Postmates, the #4 player in the food delivery market, has particularly strength in Los Angeles and Miami. Postmates filed confidentially for an IPO last year; the company has raised $903 million in venture capital from Tiger Global, Blackrock and other investors.

GoPuff, a venture-backed Philadelphia-based company focused on delivery of convenience products, has raised $866.8 million from a group of investors that includes Accel and the Softbank Vision Fund.

Squali notes that the influx of capital into the food delivery sector in recent years has “driven questionable incentives and grow-at-all-cost strategies, prompting many investors to question if food delivery was a good business.”

His view is that “it can be a good business, given the value it creates for consumers and restaurants, its large [total addressable market] and winner-take-most market dynamics, but just like with any industry, influx of excess capital has depressed returns for all players.” But he adds that “excess capital is a cyclical phenomenon, and while it can be a headwind in the short run, market leaders with sustainable competitive advantages should enjoy strong economics for the value they create over the long run.”

Uber, which fell 13.3% last week, on Monday is down 1.2%, to $31.86.

*by Eric J. Savitz via Barron’s*