Goldman Sachs reiterates Uber stock Conviction Buy with $96 target

On Wednesday, Goldman Sachs maintained a Conviction Buy rating on Uber Technologies Inc . (NYSE: NYSE:UBER), now valued at $141.25 billion, with a steadfast price target of $96.00. The firm's analysis focused on two major areas of investor interest: the implications of autonomous vehicle (AV) technology on the ridesharing industry and the components of Uber's medium-term revenue growth as presented during its 2024 Investor Day. According to InvestingPro data, Uber maintains a "GREAT" financial health score of 3.13, suggesting strong fundamental positioning.

Goldman Sachs outlined the expected influence of Waymo on Uber's financial outlook for 2026, the future of ridesharing in an AV-dominated landscape, and a comprehensive breakdown of the growth drivers intended to help Uber achieve its 2026 financial goals. This included projections for Uber One Gross Bookings (GBs), new product contributions, and more detailed Mobility and Delivery metrics. The company's recent performance supports this optimistic outlook, with revenue growing 16.7% to $41.95 billion in the last twelve months.

The firm highlighted Uber's strategy, emphasizing the company's focus on expanding markets, improving profitability, and leveraging platform cross-sell opportunities to boost investor returns. Despite the challenges posed by the development of AV technology, Goldman Sachs expressed confidence in Uber's potential to deliver a compelling multi-year internal rate of return (IRR) without relying on multiple expansion. This optimism is supported by the expectation that Uber will grow its earnings per share (EPS) by nearly 30% per year through 2026, potentially producing upwards of $3.50 in GAAP EPS.

Goldman Sachs reaffirmed its conviction in Uber's stock, citing the current discrepancy between the company's stock price performance, valuation, and its earnings capabilities. The firm's endorsement suggests strong confidence in Uber's risk-reward profile within its large-cap coverage universe.

In other recent news, Lyft Inc (NASDAQ:LYFT). experienced a significant setback as Delta Air Lines (NYSE:DAL) ended its partnership with the rideshare company in favor of Uber. This move, which allows Delta's SkyMiles loyalty program customers to earn miles through Uber rides and deliveries, could impact Lyft's growth strategy and earnings estimates. Analyst Brian Nowak from Morgan Stanley (NYSE:MS) highlighted the competitive risks that Lyft faces from Uber's aggressive partnership strategy.

Meanwhile, Uber Technologies Inc has been making strides in the autonomous vehicle (AV) sector. The company recently announced a strategic partnership with Nvidia Corp (NASDAQ:NVDA) to expedite the development of autonomous driving technology. This collaboration will leverage Nvidia's AI platforms and Uber's extensive data from daily trips to build more robust AI models.

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