Five things to watch in markets in the week ahead
On Monday, Needham reiterated its Buy rating on Uber Technologies Inc . (NYSE:UBER), currently trading at $68.56 with a market cap of $144.4 billion, with a price target of $90.00. According to InvestingPro, Uber maintains its position as a prominent player in the Ground Transportation industry, with an overall "GREAT" financial health score. The firm's latest Mobility Tracker indicated a notable shift in the competitive landscape between Uber and its rival Lyft , with Lyft now showing shorter wait times and on average lower pricing in November and December compared to Uber. This is a significant change, as Lyft has traditionally only led in pricing. With Uber's next earnings report due on February 5th, InvestingPro subscribers can access 10+ additional exclusive insights and detailed financial metrics to better understand these competitive dynamics.
The analysis suggests that this shift may be due to supply factors, as recent product initiatives by Lyft are believed to be improving driver supply. The balance between supply and demand is anticipated to be a focal point of interest during the upcoming earnings reports. Despite these market dynamics, Needham has decided to keep its organic rideshare estimates for both Uber and Lyft unchanged.
However, the stronger U.S. dollar is expected to reduce Uber's reported figures by 2.4% for the 2025 estimates, positioning Needham's expectations towards the lower end of the consensus. Additionally, an early assessment of the congestion fee in New York City reveals that while Lyft appears to be absorbing the fee increase, Uber is passing along at least a portion of it to consumers. The long-term effects of these pricing and policy changes on the competitive stance of both companies remain to be seen in their financial outcomes.
In other recent news, Uber Technologies Inc. has been making notable strides in several areas. The company has formed a partnership with Wegmans Food Markets, Inc., expanding its grocery delivery services through the Uber Eats app to several states. This move is expected to provide consumers with more convenient access to high-quality food options.
Uber has also caught the attention of Goldman Sachs, which has reiterated its Conviction Buy rating on the company, focusing on the implications of autonomous vehicle technology and Uber's medium-term revenue growth. The company's revenue has grown by 16.7% to $41.95 billion in the last twelve months.
Furthermore, a significant shift has occurred in the ridesharing industry as Delta Air Lines (NYSE:DAL) has ended its partnership with Lyft Inc (NASDAQ:LYFT). in favor of Uber, allowing Delta's SkyMiles loyalty program customers to earn miles through Uber rides and deliveries.
In addition, Uber has announced a strategic partnership with Nvidia Corp (NASDAQ:NVDA) to expedite the development of autonomous driving technology. This collaboration aims to leverage Nvidia's AI platforms and Uber's extensive data from daily trips to build more robust AI models.
Finally, Citi has maintained a Buy rating and a $98.00 price target for Uber's shares, following the announcement of a $1.5 billion Accelerated Share Repurchase program, expected to conclude within the first quarter of 2025. These recent developments underscore Uber's strategic efforts in expanding markets, improving profitability, and leveraging platform cross-sell opportunities to boost investor returns.
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