Uber maintains Buy rating, price target set at $90 by TD Cowen

On Thursday, TD Cowen upheld its Buy rating for Uber Technologies Inc . (NYSE:UBER), maintaining a $90.00 price target for the ride-hailing company's shares. The firm's stance comes amid discussions regarding the impact of autonomous vehicles (AVs) on Uber's business model. The analysis by TD Cowen suggests that the deployment of cost-effective autonomous vehicles is crucial for Uber to scale its technology effectively.

According to TD Cowen, if the cost of an autonomous vehicle exceeds approximately $88,000, it would result in a lower gross profit per ride compared to rides provided by human drivers. The firm emphasized the importance of Uber's role as a marketplace network for AV developers, which is expected to be a significant factor in the company's growth strategy.

The firm believes that Uber's position in the market, combined with the expansion of its global business, positions it well to capitalize on the advancements in autonomous vehicle technology. The $90 price target reflects the firm's confidence in Uber's potential to leverage its network and scale its operations as the technology evolves.

Uber's stock continues to be monitored by investors as the company navigates the rapidly changing landscape of personal transportation, with autonomous vehicles playing an increasingly prominent role. The maintained price target and rating by TD Cowen indicate a positive outlook on the company's ability to adapt and thrive in the face of these technological developments.

In other recent news, Uber Technologies has 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, they aim to introduce robotaxi rides in Dallas next year. Avride, which has a history of making 200,000 deliveries across five countries, plans to significantly increase its presence within the Uber Eats service.

In addition, 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. TD Cowen maintained a Buy rating, emphasizing the potential impact of autonomous vehicle technology on Uber's business model. Meanwhile, Oppenheimer increased its price target for Uber, citing growth prospects in delivery services.

Uber has also 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.

InvestingPro Insights

To complement TD Cowen's analysis of Uber Technologies Inc. (NYSE:UBER), InvestingPro data provides additional context for investors. Uber's market capitalization stands at $153.05 billion, reflecting its significant presence in the ground transportation industry. The company's revenue for the last twelve months as of Q2 2024 reached $40.06 billion, with a robust revenue growth of 14.44% over the same period.

InvestingPro Tips highlight that Uber is expected to see net income growth this year, aligning with TD Cowen's optimistic outlook. This expectation is further supported by the fact that three analysts have revised their earnings upwards for the upcoming period. These positive indicators suggest that Uber's strategic positioning, including its potential to leverage autonomous vehicle technology, is resonating with market analysts.

While Uber trades at a high P/E ratio of 74.98, an InvestingPro Tip notes that it's trading at a low P/E ratio relative to near-term earnings growth, with a PEG ratio of 0.14. This could indicate that the stock is potentially undervalued considering its growth prospects, which may include the successful integration of AVs into its business model.

For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights, with 13 more tips available for Uber. These could provide valuable perspective on Uber's financial health and market position as it navigates the evolving landscape of ride-hailing and autonomous vehicle technology.

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