On Tuesday, TD Cowen showed confidence in Uber Technologies Inc . (NYSE:UBER) by increasing its stock price target from $88.00 to $90.00, while reiterating a Buy rating on the stock. The firm's outlook is based on the anticipation of continued growth in Uber's Mobility and Delivery services.
The analyst from TD Cowen projects that Uber's gross bookings (GBs) for the second quarter of 2024 will reach $39.7 billion, marking an 18.3% year-over-year increase. This figure is slightly higher than the consensus and near the upper end of Uber's forecasted range of $38.75 billion to $40.25 billion. The expected growth is attributed to sustained strength in both Mobility and Delivery segments.
Moreover, the analyst anticipates Uber's EBITDA to surge by 65% year-over-year, surpassing the midpoint of the company's guidance. This optimistic forecast has led to a slight upward adjustment in the long-term estimates for Mobility and Delivery GBs and EBITDA, ranging from 1% to 2% annually for the years 2025 to 2028.
TD Cowen's positive stance on Uber is reinforced by the company's strategic moves to capitalize on growth vectors within its business segments, which supports the decision to maintain a Buy rating and lift the price target. Uber's focus on expanding its core services is expected to drive further financial improvements in the coming years.
In other recent news, Uber Technologies Inc. has been a subject of various recent developments. Melius Research initiated coverage on the company with a Hold rating and a price target of $77.00, emphasizing Uber's diverse services and robust growth trajectory. Wolfe Research also initiated coverage, assigning an Outperform rating and a $90.00 price target, highlighting Uber's strong market position and the expectation of continued demand for its services.
In legal developments, the Court of Appeal in the United Kingdom reversed a previous decision requiring private-hire taxi operators to pay a 20% value-added tax on profit margins for services outside of London. In Massachusetts, the Supreme Judicial Court ruled in favor of allowing voters to decide if drivers for app-based services like Uber should be recognized as independent contractors with access to certain benefits.
Uber also launched the "One Less Car" initiative, offering $1,000 in credits to select car owners in the U.S. and Canada who agree to stop using their cars for five weeks. This initiative aims to reduce emissions and promote the use of public and other transportation services. Lastly, Citi increased its price target for Uber shares to $96, up from $93, citing confidence in the company's ability to meet its growth targets.
InvestingPro Insights
Uber Technologies Inc. (NYSE:UBER) has been a topic of interest for investors, particularly as TD Cowen raised its price target. Complementing this analysis, InvestingPro offers additional insights that could be pertinent for investors considering Uber's stock.
According to InvestingPro data, Uber's Market Cap stands at a robust $142.09 billion, reflecting the scale of its operations within the Ground Transportation industry. While the stock has experienced a notable decline over the past week, with a 1 Week Price Total Return of -8.84%, analysts predict the company will be profitable this year, which could indicate a potential rebound.
InvestingPro Tips suggest that Uber is trading at a low P/E ratio relative to near-term earnings growth, with a PEG Ratio for the last twelve months as of Q1 2024 at 0.75, signaling potential undervaluation based on growth expectations.
Moreover, the company operates with a moderate level of debt, which might provide some financial flexibility. For investors looking for more in-depth analysis, InvestingPro offers additional tips on Uber's performance and future outlook. By using the coupon code PRONEWS24, readers can get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, unlocking access to a wealth of information including 11 more InvestingPro Tips for Uber.
These insights could be valuable for investors as they evaluate Uber's current position and future prospects, especially in light of the recent price target adjustment by TD Cowen. With the combination of professional analysis and real-time data from InvestingPro, investors are equipped to make more informed decisions.
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