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Uber Hailed by Analysts Despite Pandemic-Driven Earnings Miss

Analysts raise their price targets on Uber in anticipation of brighter days ahead.

Uber Technologies  (UBER) - Get Uber Technologies Inc. Report declined Thursday following a fourth-quarter earnings miss that was driven by a pandemic-related lack of ridership even as analysts raised their one-year price targets in anticipation of brighter days for the ride-sharing giant.

Shares of Uber were down 2.74% at $61.45 after the company reported a narrower fourth-quarter loss, helped by a strong showing in its food-delivery business. Uber said its delivery business bookings more than doubled (up 130%) to $10.05 billion, largely offsetting a decline of 50% in its ride-hailing business from a year earlier.

While investors focused on the drop in ride-hailing revenue, analysts were more positive on the San Francisco-based company’s food-delivery gains and longer-term prospects, with several zeroing in on Uber’s expected post-pandemic bounce back.

Wedbush Securites analyst Dan Ives raised his one-year price target on Uber to $76 from $60, noting the results were “a step in the right direction” as earnings before income, taxes, depreciation and amortization and gross bookings beat expectations.

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“A rebound in ride sharing over the next year and a clearer route to profitability is likely to make the stock move higher,” Ives wrote in a note to clients. He has an outperform rating on the stock.

KeyBanc analyst Edward Yruma, meanwhile, raised his one-year price target to $75 from $63, noting that while pressure remains on the mobility side of Uber’s business, strength in delivery as pandemic trends continue with the acquisition of alcohol delivery service Drizly provides “room for further growth.” 

He also has an overweight rating on the stock.

Cowen analyst John Blackledge, meantime, raised his price target to $74 from $64, noting that he too expects a rebound in Uber ridership in the second half of this year. He too held his outperforming rating on the shares.

Other analysts including Morgan Stanley's Brian Nowak and Citi's Itay Michaeli also weighed in, with Nowak calling the results “mixed” and Michaeli noting some “put/takes” in the results, though nothing his team saw was unexpected.