On Monday, BofA Securities maintained its Buy rating and $88.00 price target for Uber Technologies Inc . (NYSE: NYSE:UBER), despite the ride-hailing company facing increased competition in the autonomous vehicle (AV) space. The firm's stance comes amid speculation about potential advancements from Tesla (NASDAQ:TSLA), expected to be announced at their event on October 10.
The analyst from BofA Securities highlighted that Uber's shares have shown weakness due to third-party data indicating that Waymo has been gaining market share in San Francisco and Los Angeles. Additionally, there is market anticipation surrounding Tesla's upcoming robotaxi day, where they may reveal a new cost-effective vehicle per mile, advancements in AV software, and a consumer application.
Despite these factors, BofA Securities remains optimistic about Uber's position in the AV landscape. The analyst pointed out that Tesla is not the only company with capabilities in AV technology, noting that similar technology by Wayve is present in the UK. It is expected that other automobile manufacturers will bridge any initial technological gaps.
Furthermore, the firm believes that even if Tesla introduces new technology, it would require several quarters or even years of testing to achieve full autonomy. This period would offer Uber and others time to narrow the technological divide. The growing competition in the AV sector, which includes companies like Cruise, Waymo, and Amazon (NASDAQ:AMZN), is seen as a positive for Uber's partnership initiatives.
The valuation of Uber at 15 times its forecasted 2026 free cash flow (FCF) is considered a discount compared to the FANG stocks, which are valued at 22 times. The BofA Securities analyst's statement underscores the firm's confidence in Uber's long-term prospects, maintaining a Buy recommendation for the company's stock.
In other recent news, Oracle Corporation (NYSE:ORCL) has seen its stock rating upgraded to Buy by Melius, a move driven by confidence in the company's advancements in artificial intelligence and strategic partnerships. The analyst predicts Oracle could achieve an earnings per share run rate close to $8.50 within the next two years. Meanwhile, Tesla Inc. has received positive analyst coverage from Deutsche Bank and Morgan Stanley, highlighting the company's potential in areas beyond electric vehicles such as artificial intelligence, robotics, and energy storage.
Recent developments also include the U.S. implementing a 100% duty on electric vehicles, a move that may impact Tesla's supply chains. Despite this, the European Union is set to reduce proposed tariffs on Chinese electric vehicles, including Tesla's, to slightly below 8%. This adjustment comes after new information was provided to the EU.
Additionally, China has invited the European Commission for discussions to address trade disputes, including those concerning tariffs on Chinese electric vehicles.
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