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Dara Khosrowshahi, President and CEO of Uber Technologies, participates in a webcast at the company's IPO on the New York Stock Exchange floor on May 10, 2019.
Michael Nagle | Bloomberg | Getty Images
The main Wall Street banks on Tuesday expressed their support for Uber after a series of purchase ratings on the distressed stock.
Most major analysts began to cover the race by greeting the company on Tuesday, thus respecting a typical grace period of underwriting companies and other major analysts. Uber is down 8.3% from the company's highly anticipated start on May 9 at $ 45 per share. The first earnings reports, mostly mixed last week, did not stimulate the recovery of equities.
But Wall Street thinks it's an opportunity to buy for customers. Shares rose 2.8% in pre-sale transactions on reports. According to Tipranks.com, 20 analysts note Uber and none tell them to sell the stock. Sixteen say "buy" and four say "waiting".
"We view Uber as the most attractive IPO on the internet since Facebook and believe that concerns related to Uber's profitability prospects pose less risk than Facebook's transition to mobile at this time" , said Deutsche Bank. The company has rated Uber as a purchase.
"Uber is a processing company that is expected to benefit from secular changes in favor of the sharing economy (Rides), time-saving services (Eats) and more efficient market evolution (Freight ), "said Bank of America.
Another analyst says that the sky is the limit of Uber's growth opportunities.
"The growth platform is long for the Uber platform to grow in number of users and frequency of use across all products … and on a large scale, a path to profitability. "
For sure, skeptics will say that this is just a typical Wall Street example that tries to publicize a new issue that it wants to buy so that investors can acquire future investment banking activities. Yet, it is rare to see such a bullish crowd on a stock.
Here's what leading analysts say about Uber on Tuesday:
Deutsche Bank – Purchase note
"We view Uber as the most attractive IPO on the Internet since Facebook and believe that concerns about its profitability prospects pose less risk than Facebook's transition to mobile at this time." We are seeing signs of rationalization in the competitive dynamics of carpooling. " Uber's and Lyft's low-profile IPOs, which may hinder unsustainable private financing, should lead to improved competitive dynamics and margins for Uber. Look at the high contribution margins of some markets and the speed with which Yandex was able to generate profits The ease with which carpooling can be achieved after its consolidation with Uber in Russia gives us confidence in Uber's long-term profit potential. This market, coupled with a large and addressable market, longer-term purchase options for the freight sector and ATG, we believe that this world leader is well positioned to dominate the history of TaaS during years to come. The BUY rating and a $ 58 price target reflect a global valuation incorporating premium multiples on car pooling and meals, due to their leading position in multiple markets and on many fronts of business. "
Barclays – Overweight Index
"Initiate coverage on UBER (OW) and LYFT (EW): The future promise of Ride-hailer is almost as impressive as the capital destroyed since the launch of the" Scorched Earth "strategies, after experiencing two of the worst IPOs in the world. Technology history We believe that the consensus is too bearish on the economy of the amusement ride units, which are close to the current balance for Uber and are slowly approaching that level for Lyft., With growth rates higher than most of the other large caps we cover, we would dive into the water and take a position, but we expected the names to continue to wind a little (and if S + P continued to trade We prefer the UBER shares to LYFT, which are based on a better efficiency of the unit, but we think that both solutions are effective, but we think that both solutions are effective. 100 pages from a bottom-up perspective on UBER and LYFT, and we publish a related article from top to bottom alongside our Global Autos team: see "Cutting the Car Ownership Lines" by Brian Johnson and Kristina Church , 6/4/19).
Mizuho – Purchase note
"We are starting Uber's hedge with a purchase price and $ 50 PT Uber occupies a leadership position in the carpool category, which represents nearly 70% of its total TAM of nearly $ 6 billion. The current fierce competition is likely to streamline the As a result, we believe that Uber has a lot of room for operational leverage through economies of scale. is positive by 2022 and that it reaches a margin of 10.4% in 2023. Our PT is based on a SOTP method and 22 times our EBITDA forecast for 2023 (against a CAGR estimated at 35%). "
Morgan Stanley – overweight
"Uber was founded 10 years ago, but we believe that it is still in its infancy (carpooling / Eats) and its new opportunities (Freight, Autonomy, New Mobility). the Uber user in sharing what we consider to be his demographic core (18-50 years old, household greater than $ 50,000) is still only ~ 20% in its oldest market (the United States ) and only 6% of the US population as a whole The total penetration of the population by international carpooling (estimated at 2%) is even lower and Uber Eats (<1% global penetration) is even earlier. Growth platform is long for the Uber platform to increase the number of users, and the frequency of use between products … and large-scale, a path to the profitability. "
Bank of America – Call Number
"Uber is a transformation company that should take advantage of the secular evolution of the sharing economy (Rides), time-saving services (Eats) and a more efficient evolution of the market (Freight) Our thesis is based on: 1) An attractive sector with only 1% penetration of TAM, 2) Uber & Lyft signaling a more rational environment, growth in net sales ("ANR") should be re- accelerate, 3) The effects of leadership and networking on the part are long-term benefits, and profitability in less competitive markets be attractive, 4) autonomous vehicles will reduce driver dependency and increase long-term margins, and 5) consolidation of the food distribution sector will benefit Eats. "
Goldman Sachs – Appraisal Quote
"Uber is the leader in the category, creating what has become a disruptive and challenging market over the past eight years." We view mobility as a huge opportunity, but the path to reach it is far from over. to be a straight line.While it already exists We believe that long-term market leadership is far from being acquired and that the inherent risks of ownership in the market, both as and when services and competitors evolve, are important.We believe that the risk / benefit of owning the leader in this space is favorable and start to cover Uber with a goal of purchase and a price target of $ 56. "
Oppenheimer – Rating of outperformance
"We are starting to cover Uber Technologies, Inc. with an Outperform rating and a $ 55 price target over 12-18 months.Uber has carved out a leading position in the carpool market (65% in most regions and 69% in the US) In addition to the company's state-of-the-art technology, Uber has more network liquidity than its peers, with more than 93 million active customers per month on the platforms. In our opinion, carpooling (currently ~ 1% of TAM) and online food delivery (~ 15% of TAM adoption) are still underdeveloped in the world and we believe that technology Uber and the liquidity of its network are better placed than its peers to gain additional market share.Our price target of $ 55 implies sales of 4.1x to 2020F compared to 3.9x. market peers at 4.9x. "
RBC – Outperform
"Initiate with Outperform & $ 62 PT Uber is the world's leading mass-market carpool and meal delivery operator, delivering sustained growth, leading edge technologies, products and operations. Significant option in new business units (eg, freight) .We think the market underestimates UBER's profit potential. "
SunTrust Evaluation- Buy
"Uber capitalizes on powerful secular trends around improving technology / ubiquity of personal mobile devices and consumer preferences, to transform a vast yet highly inefficient transportation market." Uber dominates the Ridesharing (eg China) with network-building effects "win-take-over" markets ".
BTIG- Buy rating
"We are starting our search coverage independently with Uber and Lyft and we are starting a cover with" Buy "ratings on both." Our price target is $ 80 for Uber and $ 77 for Lyft, as shown below. We believe that both companies can generate an efficient profitability taxi / driver service.This probably justifies even the current valuations of these companies.However, we think that the reason why investors should own these actions in the long run will be the role that both companies will be able to play in an autonomous future. "
Cowen- Outperform Evaluation
"Uber is well positioned to develop its Ridesharing & Eats units as positive secular trends drive an increase in the number of users and frequency, generating 20% + annual growth in bookings from 19E to 24E Our earnings per unit-contribution analysis suggests that carpooling activity is profitable per trip, while the number of meals lost per trip will decrease as the business evolves, with Uber posting positive EBITDA by the end of the year. to 22. Prime the hedge with outperformance and 58 USD. "
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