Bernstein cuts Lyft stock price target to $15, maintains rating

On Thursday, Bernstein analysts, led by Nikhil Devnani, adjusted their outlook on Lyft shares (NASDAQ:LYFT), reducing the price target from $18.00 to $15.00 while sustaining a Market Perform rating. According to InvestingPro data, Lyft’s stock is currently trading below its Fair Value, with analyst targets ranging from $14 to $26. The revision follows Lyft’s recent guidance, which highlighted a notable decrease in pricing from mid-December into January, contrasting with Uber (NYSE:UBER)’s message that UberX prices are expected to rise modestly in 2025.

Lyft’s fourth-quarter earnings report has brought competitive intensity within the ride-sharing industry to the forefront, sparking confusion among analysts due to the divergent narratives presented by Lyft and its competitor, Uber. Despite market concerns, InvestingPro analysis shows Lyft achieved impressive revenue growth of 31.4% in the last twelve months, with five analysts recently revising their earnings estimates upward. Lyft’s commentary on the unexpected drop in pricing has introduced uncertainty into the market, potentially impacting investor sentiment towards both companies.

Despite the lowered price target, Lyft has demonstrated some positive developments, including progress in operating margins, the initiation of a stock buyback program, and the announcement of a favorable autonomous vehicle (AV) partnership earlier in the week. InvestingPro data reveals the company maintains a healthy gross profit margin of 34.6% and holds more cash than debt on its balance sheet. These factors, however, may be overshadowed by the concerns raised over pricing strategies, as investors weigh the implications for Lyft’s financial performance. For deeper insights into Lyft’s financial health and growth prospects, check out the comprehensive Pro Research Report available on InvestingPro.

The Bernstein analysis suggests that the pricing commentary might also have repercussions for Uber stock, though the expectation is for Uber’s prices to increase modestly this year. The reassessment of Lyft’s earnings before interest, taxes, depreciation, and amortization (EBITDA) to mid-single-digit (MSD) declines has informed the new price target, marking a $3 decrease from the previous estimate.

Investors and market observers will be closely monitoring how these pricing dynamics play out in the ride-sharing industry, particularly as Lyft and Uber navigate the competitive landscape and strive to balance growth with profitability.

In other recent news, Lyft has seen a series of changes to its stock targets by different firms. RBC Capital Markets analyst Brad Erickson lowered Lyft’s stock price target to $21, maintaining an Outperform rating despite challenges faced in the fourth quarter. Erickson remains optimistic about Lyft’s long-term prospects, citing its ability to sustain competition.

DA Davidson also revised its price target for Lyft, reducing it to $15 while maintaining a neutral stance. Analyst Tom White noted Lyft’s fourth-quarter adjusted EBITDA surpassed consensus, reaching $112.8 million, and acknowledged the company’s continued cost management efforts despite lower Gross Bookings forecast.

BMO Capital Markets adjusted its outlook on Lyft, reducing the price target to $15, attributing this to Lyft’s first-quarter 2025 earnings bookings growth guidance and the recent termination of Lyft’s partnership with Delta. However, the firm also highlighted that Lyft’s investment in autonomous vehicles could be starting to pay off.

Benchmark analyst Daniel L. Kurnos maintained a Buy rating on Lyft with a $20 price target. Despite challenges with pricing strategies and the loss of the Delta partnership, Kurnos remains optimistic about Lyft’s growth potential. He also pointed out Lyft’s recent announcement of a new $500 million stock buyback program.

Finally, Cantor Fitzgerald analyst Deepak Mathivanan adjusted the price target for Lyft shares to $14, retaining a Neutral rating. This followed Lyft’s fourth-quarter earnings report, which revealed bookings slightly below the forecast, though EBITDA exceeded expectations. Despite operational progress, Lyft faces challenges due to recent shifts in pricing dynamics.

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