Stifel initiates Uber stock with a buy rating, sees $110 target

On Tuesday, Stifel analysts initiated coverage on Uber Technologies Inc . (NYSE: NYSE:UBER) with a Buy rating and set a price target of $110, representing potential upside from the current price of $86.42. With a market capitalization of $180.7 billion and a "GREAT" financial health score according to InvestingPro, Uber’s evolution into a super app continues to impress analysts, highlighting its diverse services such as ride-hailing, food delivery, and grocery delivery.

The analysts are confident in Uber’s ability to meet or exceed its financial targets set in early 2024, which include mid-to-high-teens growth in gross bookings and a high EBITDA compound annual growth rate. This confidence is supported by Uber’s strong performance metrics, including 17.6% revenue growth and a P/E ratio of 14.78. The company’s performance in 2024, with 21% growth in gross bookings and 60% growth in EBITDA, further validates this optimism.

Looking ahead, the analysts project 16% growth in gross bookings for both 2025 and 2026, driven by expansion into non-urban areas and international markets. They also anticipate increased adoption of Uber One, contributing to higher usage frequency and affordability.

The analysts are also optimistic about Uber’s potential in the delivery and advertising sectors. They see Uber’s location data as a significant advantage, potentially attracting both national and local businesses, and expect the company’s low advertising penetration to present a growth opportunity.

In other recent news, Uber Technologies Inc. has reported several significant developments. Fitch Ratings upgraded Uber’s credit rating to ’BBB+’ from ’BBB’, citing a positive outlook due to the company’s growing profit diversity and expanding profitability in its delivery segment. Uber’s delivery segment has notably improved its EBITDA margin to 20% in Q1 2025, contributing significantly to the company’s adjusted EBITDA. Meanwhile, Uber announced a partnership with Wayve to trial fully autonomous rides in the U.K., marking a notable step towards global competition in autonomous ride services. Additionally, Uber is exploring the use of stablecoins for international money transfers, as stated by CEO Dara Khosrowshahi, which could potentially reduce costs for global transactions.

Furthermore, Uber has introduced senior-friendly features, including senior accounts and a Simple mode to enhance accessibility for older adults. These features aim to simplify the app interface, making it more intuitive for seniors. Uber’s commitment to accessible transportation was highlighted by Ashu Manohar, Director of Product Management, who emphasized the importance of these new features. These initiatives reflect Uber’s ongoing efforts to diversify its services and improve user experience across different segments.

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