By Sam Boughedda
Barclays analyst Ross Sandler raised the firm's price target on Uber (NYSE:UBER) to $53 per share from $48, maintaining an Overweight rating Wednesday.
In a note to investors, the analyst said that it is time to revisit the Uber bull case, "full stop."
The analyst argued: "In contrast to the prevailing negative sentiment we hear from the investment community, a contrarian take that is not being considered but we think should be is that UBER may be a major beneficiary of a recession (driver supply easing) and the implosion in private market funding markets as lots of tier-two competitors fall by the wayside."
Sandler continued that he can’t think of another name in Barclays' coverage that fits this profile and that UBER is close to an important inflection point around positive FCF and self-funding, which may cause some of the bearish sentiment to abate.
"One of the best times to generate positive returns in consumer internet tends to be when stocks go from the sentiment doghouse to less-bad and eventually to the positive camp – we think this may be one of those moments for UBER," added Sandler. "In late 2019, UBER traded at a premium to BKNG, and today it has flipped to a fairly wide discount (50% on GBs and 15%+ on GP) which could converge as fundamentals improve."