Lyft stock target cut to $15 by BMO on bookings outlook

On Wednesday, BMO Capital Markets adjusted its outlook on Lyft (NASDAQ:LYFT), reducing the price target from the previous $18.00 to $15.00, while the stock currently trades at $13.44. The firm continues to hold a Market Perform rating on the rideshare company’s shares. InvestingPro data shows analyst targets ranging from $14 to $26, with the stock displaying significant volatility in recent months. The revision was prompted by several factors influencing Lyft’s near-term prospects, according to BMO Capital’s analyst.

The lowered price target is attributed to Lyft’s first-quarter 2025 earnings (1Q25E) bookings growth guidance, which is anticipated to be between 10-14%, falling short of the company’s mid-teens growth projection over a three-year period. According to InvestingPro analysis, Lyft has maintained strong revenue growth of 31.4% over the last twelve months, though the company faces some financial challenges with short-term obligations exceeding liquid assets. Additionally, BMO Capital noted that the trend of price erosion, which began at the end of 2024, is expected to persist into the first quarter of 2025.

Another contributing factor to the revised price target is the recent termination of Lyft’s partnership with Delta, which is projected to create a 1-2% drag on the company’s Gross Bookings. This partnership’s end is seen as a minor yet significant obstacle for Lyft’s revenue.

Despite these concerns, BMO Capital highlighted a positive aspect from Lyft’s fourth-quarter 2024 actuals (4Q24A). The analyst pointed out that autonomous vehicles (AVs) are becoming increasingly supplemental to the overall rideshare market. This development suggests that Lyft’s investment in AV technology could be starting to pay off, offering a glimmer of optimism amid a cautious outlook.

The price target adjustment by BMO Capital reflects the challenges and opportunities Lyft faces as it navigates market dynamics and competition within the rideshare industry. The maintenance of the Market Perform rating indicates that the firm sees Lyft’s stock as fairly valued given the current circumstances.

In other recent news, ride-sharing company Lyft has been the subject of several analyst notes. Benchmark analyst Daniel L. Kurnos maintained a Buy rating on Lyft, despite acknowledging challenges such as competitive dynamics with Uber (NYSE:UBER) and the loss of its partnership with Delta. Kurnos also emphasized Lyft’s recent announcement of a $500 million stock buyback program, signaling confidence in the company’s financial prospects.

Simultaneously, Cantor Fitzgerald analyst Deepak Mathivanan adjusted the price target for Lyft shares to $14, retaining a Neutral rating. The revision followed Lyft’s fourth-quarter earnings report, which showed bookings slightly below the forecast but EBITDA exceeding expectations. Mathivanan attributed this shortfall to recent declines in industry pricing trends.

JPMorgan also expressed concerns about the competitive landscape in the ride-share industry and adjusted its outlook on Lyft shares, setting a new price target of $16. The firm noted Lyft’s improved execution over the past year but highlighted that the end of the Delta partnership is expected to impact Lyft’s growth.

Evercore ISI reduced its price target for Lyft stock to $15.00, maintaining an ’In Line’ rating. The firm pointed out that the central issue for Lyft is maintaining revenue growth while also increasing profitability. Lastly, Goldman Sachs analyst Eric Sheridan maintained a Neutral rating and a $20.00 price target on Lyft, highlighting the company’s progress in operational and financial Key Performance Indicators (KPIs). These recent developments provide insights into the current state of Lyft’s performance and future expectations.

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