Subscribers of Lyft welcome the promising future of Uber

(Reuters) – Lyft Inc on Tuesday received encouraging ratings from brokerage firms of its Wall Street underwriters, allowing the company to recover some of the damage caused to the price of its stock in the early days of his rival Uber Technologies Inc.

The Lyft shares, which at Monday's close were down 30% from its IPO on March 29, rose 2.5% to $ 62.49 in trading session before the bell . This puts them close to 10% in the last week after bottoming below $ 56.

At least seven brokerage firms, including Jefferies, JP Morgan and Piper Jaffray, began Lyft's hedge with "buy" or "buy" ratings, even as the stock price was more than 15% lower than the price fixed during its IPO last month.

Piper Jaffray expects "strong short-term results" as the company has gained market share over the last few quarters, but believes that the path to a positive net result will be a "multi-year path". The brokerage firm has established a hedge with an overweight rating and a target price of $ 78.

At Monday's prices, Lyft had a market value of about $ 17 billion. She and Uber both warned that they could never become profitable, which would make it more difficult for investors to evaluate their value.

Still, broker badysts remained confident in Lyft's long-term prospects, despite Uber's competition both on the US streets and among stock market investors.

"Uber's record has added some pressure, and we recognize that the upcoming roadshow could create more uncertainty in the near term, but we believe Lyft continues to work well," said Doug Anmuth, an badyst at JP Morgan.

Reuters had announced that Uber was planning to sell shares worth about $ 10 billion with a valuation of between $ 90 billion and $ 100 billion. His IPO is scheduled for mid-May.

More than 24 brokerage firms participated in the Lyft IPO. Industry standards require badysts from these companies to wait until the end of the 25-day cooling-off period following the IPO before launching the coverage.

Canaccord, Cowen and JMP Securities, at least three of Lyft's subscribers, also support the Uber transaction, according to documents filed by the SEC.

Some investors give more weight to the opinions of badysts working in brokerage firms involved in underwriting a company's IPO than they do to badysts of brokerage firms not participating in the IPO's introduction. stock Exchange.

With the initiations on Tuesday, 13 badysts now cover Lyft, with five positive ratings, seven neutral ratings and a negative rating. Analysts had a median price target of $ 74, down from a median price target of $ 75 on Monday.

Analysts on average expect Lyft's revenue in 2019 to rise from 57.3 percent to $ 3.39 billion, according to Refinitiv data, a slower pace than in previous years. Lyft's turnover doubled last year after tripling in 2017.