On Wednesday, BofA Securities expressed a positive outlook on Uber Inc. (NYSE:UBER) stock, raising its price target on the company's shares to $96 from $88, while maintaining a Buy rating. BofA's analyst highlighted the upcoming quarterly report, set for release on October 31, and anticipates the company's performance to be slightly above the Street's expectations.
The forecast for Uber's third-quarter bookings is $41.35 billion, with revenue at $11.01 billion and EBITDA at $1.67 billion. These figures edge past the Street's projections of $41.22 billion in bookings, $10.98 billion in revenue, and $1.65 billion in EBITDA. The analyst noted that Lyft (NASDAQ:LYFT)'s stable volume trends in the third quarter, potentially influenced by pricing, alongside Uber's New Verticals, are expected to contribute to robust Mobility growth.
Additional data supporting the positive outlook includes Bank of America's aggregated credit and debit card information, which suggests that online delivery growth has accelerated slightly in September. Moreover, BSM data indicates a 1 percentage point acceleration in Uber's core bookings.
The analysis also expects Uber to meet or surpass Street estimates for a 26% constant currency Mobility growth, despite a 1 percentage point deceleration, and a 17.5% growth in its Delivery segment. The upcoming quarterly report is anticipated to provide a clearer picture of Uber's financial health and market performance.
In other recent news, Uber Technologies Inc . (NYSE:UBER) has been the subject of several positive ratings from prominent financial firms. Erste Group upgraded Uber's stock rating from Hold to Buy, reflecting their confidence in the company's potential for significant revenue, operating income, and net profit increases in the upcoming quarters. They also highlighted Uber's potential acquisition of Expedia (NASDAQ:EXPE) as a strategic move that could yield high synergy effects. TD Cowen maintained its Buy rating on Uber, emphasizing a strong Q3 EBITDA performance and projecting a 17.1% year-over-year increase in gross bookings for 2024.
Mizuho Securities sustained its Outperform rating on Uber shares amid potential acquisition talks with Expedia Group Inc., while Truist Securities reaffirmed its Buy rating despite skepticism about the viability of such a deal. BMO Capital and Jefferies also maintained their positive ratings and price targets for Uber, undeterred by potential competition from Tesla (NASDAQ:TSLA)'s Cyber Cab.
Recent developments highlight Uber's commitment to growth and innovation, including partnerships with autonomous technology startups like Avride and collaborations with Alphabet (NASDAQ:GOOGL)'s Waymo, Chinese firm WeRide, and Darden Restaurants (NYSE:DRI). Despite facing legal challenges, such as the U.S. Supreme Court's rejection of the company's appeal against California lawsuits alleging misclassification of drivers as independent contractors, Uber's resilience and adaptability are evident. These recent developments emphasize Uber's ongoing efforts to diversify and innovate within the competitive tech and transportation sectors.
InvestingPro Insights
As Uber (NYSE:UBER) approaches its October 31 earnings report, InvestingPro data and tips offer additional context to BofA's optimistic outlook. Uber's market cap stands at an impressive $168.94 billion, reflecting its dominant position in the ground transportation industry. The company's revenue for the last twelve months as of Q2 2024 reached $40.06 billion, with a robust year-over-year growth of 14.44%.
InvestingPro Tips highlight that Uber's net income is expected to grow this year, aligning with BofA's positive forecast. The company's strong financial performance is further evidenced by its profitability over the last twelve months and analysts' predictions of profitability for the current year.
Investors should note that while Uber is trading at a high earnings multiple with a P/E ratio of 82.79, it's also trading at a low P/E ratio relative to its near-term earnings growth potential. This suggests that despite the current high valuation, there may still be room for growth in line with BofA's increased price target.
For readers seeking a deeper dive into Uber's financials and market position, InvestingPro offers 14 additional tips, providing a comprehensive analysis to inform investment decisions.
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