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Investing.com - Canaccord Genuity downgraded Lyft (NASDAQ:LYFT) from Buy to Hold on Tuesday, slashing its price target to $14.00 from $22.00 amid concerns about the company’s position in an evolving autonomous vehicle landscape. Despite the downgrade, Lyft has shown strong momentum with a 9.08% return over the past week and maintains profitability with positive earnings per share of $0.14.
The research firm cited uncertainty about Lyft’s future role in a market potentially dominated by autonomous vehicle technology, comparing the possible scenario to the fate of newspapers and BlackBerry (NYSE:BB) devices that were disrupted by technological shifts.
Canaccord acknowledged that Lyft continues to demonstrate growth through its strong service platform and expanding ride-share business, but expressed concern about potential multiple compression as the autonomous vehicle market develops.
The firm outlined two possible futures for Lyft: either the company successfully transforms itself like Netflix (NASDAQ:NFLX) did, leveraging emerging technology to its advantage, or it faces marginalization by autonomous vehicle companies that control the entire value chain.
Given this uncertainty and the potential for rapid disruption, Canaccord determined a neutral rating was appropriate for Lyft in the near term, though it remains open to either outcome for the ride-sharing company.
In other recent news, Lyft is navigating several developments that could impact its business strategies and financial performance. The company is facing new minimum-pay rules for rideshare drivers in New York City, with a 5% increase in pay finalized by the city’s Taxi and Limousine Commission. This comes as a response to initial opposition from Lyft and its competitor, Uber (NYSE:UBER), against a proposed 6.1% increase. In terms of earnings forecasts, DoubleVerify (NYSE:DV) Holdings, which recently partnered with Lyft, has updated its second-quarter revenue guidance to between $180 and $184 million, indicating a 17% increase year-over-year at the midpoint.
Bernstein has maintained its Market Perform rating for Lyft, with a price target of $16, emphasizing the operational challenges in managing autonomous vehicle fleets. Meanwhile, KeyBanc Capital Markets has kept its Sector Weight rating, noting that Lyft is tracking well against its 2027 financial targets, though it might fall short in gross bookings growth. RBC Capital has reiterated its Outperform rating on Lyft, with a price target of $21, highlighting Lyft’s minimal exposure to tariffs and strong execution in the ride-hailing sector. Additionally, Lyft’s upcoming autonomous vehicle launch in Atlanta with May Mobility is noted as a positive development amid these strategic efforts.
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