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KeyBanc upgrades DoorDash, lifts Uber PT on strong growth projections

Published 09/25/2024, 05:21 AM
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Investing.com -- KeyBanc Capital Markets in a note dated Tuesday upgraded DoorDash (NASDAQ:DASH) to “overweight” and raised their price target for Uber (NYSE:UBER), signaling renewed confidence in both companies’ positioning within the mobility and delivery ecosystem.

For DoorDash, KeyBanc upgraded the stock from “sector weight” to “overweight”, along with a price target increase to $177, reflecting a 20x multiple on estimated 2026 EBITDA. 

This shift in sentiment is largely driven by DoorDash’s consistent ability to expand its presence in food delivery and make strides in new verticals like grocery. DoorDash’s market leadership is becoming increasingly evident, with the latest survey showing that 39% of respondents named it their most-used food delivery service, outpacing Uber’s 16%. 

Additionally, DoorDash has been gaining traction in grocery delivery, with 8% of respondents using it as their primary service in this category, an impressive 300-basis-point gain since late 2023.

The upgraded outlook for DoorDash is also boosted by its robust gross order volume projections. Analysts now anticipate a 17% year-over-year increase in GOV for 2025, followed by 15% growth in 2026.

EBITDA growth is similarly promising, with DoorDash expected to achieve $2.6 billion in 2025 and $3.5 billion in 2026, figures that are roughly 6% ahead of consensus expectations. 

This steady rise in GOV and EBITDA underscores DoorDash’s growing operational leverage and the scalability of its business model. The company’s push into advertising and other new revenue streams further solidifies its standing as a dominant player in the delivery landscape.

KeyBanc increased Uber’s price target to $90 from $80, citing expectations of continued profit growth.

While no major changes were made to Uber’s gross bookings or revenue estimates, the price target adjustment is driven by expectations of better-than-anticipated operating efficiencies. 

Uber’s focus on expense control is projected to fuel faster EBITDA growth, with KeyBanc raising its 2024–2026 EBITDA estimates by 1% to 2% across the board. 

By 2026, Uber’s EBITDA is expected to reach $11.3 billion, reflecting strong operational execution, particularly in its mobility segment. Uber’s disciplined approach to managing operating expenses, coupled with slight upside potential from foreign exchange fluctuations, further strengthens its financial outlook.

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