Street Calls of the Week
Investing.com - BMO Capital has raised its price target on Lyft (NASDAQ:LYFT) to $20.00 from $16.00 while maintaining a Market Perform rating on the rideshare company’s stock. The move comes as Lyft shows remarkable momentum, with the stock surging nearly 98% over the past six months and trading near its 52-week high of $23.50.
The price target increase follows Lyft’s partnership with Waymo, which BMO Capital notes is Lyft’s third major autonomous vehicle (AV) deal in the past ten months. InvestingPro analysis reveals that Lyft maintains a strong financial position, holding more cash than debt on its balance sheet, which could support its strategic AV initiatives.
BMO Capital indicates that these recent AV partnerships suggest Lyft’s management recognizes the strategic importance of the autonomous vehicle market and is working to close the gap with competitors.
The firm believes that with AV commercialization still in its early stages, Lyft has an opportunity to secure a position in the AV value chain by leveraging its demand generation capabilities and fleet management services through Flexdrive.
Despite the positive view on Lyft’s AV strategy, BMO Capital maintained its Market Perform rating on the stock while implementing the 25% increase in its price target.
In other recent news, Lyft Inc. has announced several developments that could impact its future operations. The company is testing a new feature to provide drivers with information about riders’ tipping habits and punctuality. Lyft, in collaboration with Waymo, plans to launch a fully autonomous ride-hailing service in Nashville by 2026, with its Flexdrive subsidiary managing fleet operations. This partnership will initially allow riders to hail Waymo’s autonomous vehicles through the Waymo app, with plans to integrate this service into Lyft’s network later that year.
Additionally, Lyft has launched its first autonomous vehicle service in Atlanta in partnership with May Mobility, competing directly with Waymo’s existing service in the area. Meanwhile, Waymo has obtained permission to start autonomous vehicle operations at San Francisco International Airport, potentially affecting Lyft’s revenue from airport rides. Analyst firm Cantor Fitzgerald has maintained its Neutral rating on Lyft, reflecting a cautious outlook amid these developments.
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