On Wednesday, Bernstein, a division of SocGen Group, maintained its Outperform rating and $95.00 price target for Uber Inc. (NYSE:UBER). The firm addressed the changing market sentiment towards Uber, noting that the company has become a central point of debate among US Large-Cap Internet stocks as it enters 2025. The market has recently adopted a more bearish view of Uber, influenced by concerns over the potential disruption from Autonomous Vehicles (AV) and a slowdown in growth within the US rideshare market.
Despite the challenges, Bernstein's analyst believes that Uber's fundamental outlook remains strong, with the stock's current performance not reflecting its solid fundamentals. The firm's model projects a 15% Compound Annual Growth Rate (CAGR) in Gross Bookings and a 32% CAGR in Earnings Per Share (EPS) from 2024 to 2026. However, the market seems to be overlooking these figures at the moment.
The analyst's commentary follows recent updates from Uber and competitor Lyft (NASDAQ:LYFT) regarding growth in San Francisco and market share. These updates have reinforced Bernstein's confidence in Uber's rideshare estimates, even as Waymo experiences exponential growth. Although Waymo's fleets are currently small and show signs of incrementality, Uber is still facing a challenging narrative that it needs to overcome in the year ahead.
As a result of the current market perception and the uphill battle Uber faces, Bernstein has decided to lower Uber's position in its preference list for the time being. The firm acknowledges that Uber is contending with a difficult story and has much to prove as 2025 unfolds.
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