S&P 500 slips as weaker services data stoke fresh economic concerns
On Monday, Truist Securities adjusted its outlook on Uber Inc. (NYSE:UBER), increasing the price target from $88.00 to $99.00 while maintaining a Buy rating on the stock. The firm's analysts cited a positive stance on Uber leading into the third quarter of 2024 earnings, with the company's total gross bookings (GBs) aligning closely with market consensus.
The evaluation by Truist Securities is based on data from the Truist Card, which indicates that Uber's Mobility GBs have met expectations, and Delivery GBs have slightly surpassed them. The firm's analysts highlighted the strong demand for Uber's services, attributing it to a robust consumer base, the stickiness of Uber's offerings, and continuous enhancements to its platform.
The report further emphasizes the growth potential for Uber, noting the expansion of Delivery and Mobility services, the adoption of Uber One, and a steady supply of drivers. These factors are believed to contribute to increased order frequency and underpin the firm's Buy recommendation for Uber's stock.
In addition to the operational highlights, Truist Securities pointed out Uber's financial strategies as a basis for the revised price target. The company's higher free cash flows (FCFs) and a substantial $7 billion buyback program are seen as supportive of a higher long-term valuation.
Truist Securities has introduced the new fiscal year 2025 price target of $99 for Uber, reflecting an optimistic view on the company's future performance and valuation, up from the previous fiscal year 2024 target of $88.
In other recent news, Uber Technologies Inc . (NYSE:UBER) continues to make significant strides in its operations and partnerships. TD Cowen has upheld its Buy rating for Uber, maintaining a $90.00 price target, highlighting the potential impact of autonomous vehicle technology on Uber's business model.
The company has also announced a partnership with autonomous technology startup Avride, aiming to expand its network of self-driving technology. Uber Eats plans to deploy Avride's sidewalk robots for deliveries in Austin, with expansion plans for Dallas and Jersey City.
Furthermore, Uber has received a positive outlook from several analyst firms. Wolfe Research reiterated an Outperform rating due to Uber's robust competitive edge and consistent performance, while Oppenheimer increased its price target for Uber, citing growth prospects in delivery services.
In addition, Uber has formed a delivery partnership with Darden Restaurants (NYSE:DRI), set to begin at select Olive Garden locations in late 2024. This initiative, along with Uber's partnerships with Alphabet (NASDAQ:GOOGL)'s Waymo and Chinese firm WeRide, reflects Uber's commitment to incorporate autonomous vehicles into its service offerings. These are just some of the recent developments shaping Uber's trajectory in the marketplace.
InvestingPro Insights
Complementing Truist Securities' optimistic outlook on Uber, recent data from InvestingPro provides additional context to the company's financial performance and market position. As of the last twelve months ending Q2 2024, Uber reported a robust revenue of $40.06 billion, with a notable revenue growth of 14.44%. This aligns with the firm's observations on strong consumer demand and platform enhancements.
InvestingPro Tips highlight that Uber is a "Prominent player in the Ground Transportation industry" and has shown a "High return over the last year," with a one-year price total return of 62.25% as of the latest data. These metrics support Truist Securities' bullish stance on the stock.
Furthermore, an InvestingPro Tip indicates that "Net income is expected to grow this year," which could contribute to the higher free cash flows mentioned in the Truist Securities report. The company's profitability over the last twelve months, as noted by another InvestingPro Tip, reinforces the positive financial trajectory.
For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips on Uber, providing a deeper dive into the company's financial health and market position.
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