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On Thursday, Goldman Sachs analyst Mark Delaney upgraded Aurora Innovation Inc (NASDAQ:AUR) stock rating from Sell to Neutral, setting a new price target at $6.00. Delaney's reassessment follows the passing of the previously anticipated downside risk to Street estimates due to a slower autonomous vehicle (AV) trucking ramp-up. Despite significant downward revisions to revenue estimates for 2025 and 2026 by 82% and 83%, respectively, Aurora's shares have outperformed, rising 99% compared to the S&P 500's 16% increase since January 3, 2024.
The upgrade reflects a shift in market focus from the immediate ramp-up and economics of AV trucking to the feasibility of the technology itself, which Goldman Sachs believes is achievable. The firm recognizes Aurora's leadership position in the AV trucking industry and anticipates the company will initiate driverless commercial operations on a small scale this year, starting with one truck equipped with a high level of remote assistance. InvestingPro data shows the company maintains strong liquidity with a current ratio of 11.94, though it reported an EBITDA of -$765 million in the last twelve months.
Goldman Sachs acknowledges that Aurora's valuation appears rich but justifies a higher multiple due to the market's long-term view on AV investment opportunities. Aurora also benefits from a scarcity premium as one of the few publicly traded companies with early market exposure to autonomous technology.
The company's path forward appears more balanced, with the initiation of commercial operations on the horizon. However, Goldman Sachs notes that Aurora faces a multi-year journey to profitability and will likely require additional capital. Key risks outlined by the firm include the pace of AV volume ramp-up, the company's ability to expand its supply chain partnerships, shift to a service-based model, route expansion, and the costs associated with raising capital.
In other recent news, Aurora Innovation Inc has been the focus of several analyst firms, highlighting various developments and projections for the company. Cantor Fitzgerald has maintained an Overweight rating with a $10.00 price target, expressing confidence in Aurora's progress in the autonomous trucking sector. The company has reported significant milestones, including surpassing 2.6 million miles driven with supervised autonomous trucks and achieving an Autonomous Readiness Measure of 99%. Oppenheimer initiated coverage with an Outperform rating and a $15.00 price target, emphasizing Aurora's strategic position and technological advancements in the North American autonomous trucking industry. Morgan Stanley (NYSE:MS) also began coverage with an Overweight rating and a $12.00 price target, noting the company's leadership in autonomous trucking solutions and the potential impact of its upcoming commercial rollout in April. These ratings reflect a positive outlook from analysts, who see Aurora's partnerships and technological capabilities as key assets in its growth strategy. Aurora's recent publication of its Driverless Safety Report, detailing its safety procedures, has further underscored the company's commitment to safe technology deployment. The company's strategic partnerships with Continental and NVIDIA (NASDAQ:NVDA) are expected to enhance its operational scale and efficiency. Investors are closely monitoring Aurora Innovation as it approaches its commercial launch, which is anticipated to be a significant milestone for the company.
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