Uber and Lyft Get Mixed Reviews from Analysts

UBS lowers price targets for Uber and Lyft but likes them long term. Wells Fargo likes Uber long term, too.
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Shares of Uber UBER and Lyft LYFT rose in line with the premarket as UBS and Wells Fargo issued mixed judgments on Uber and UBS lowered its price target on Lyft.

Uber is the biggest U.S. ride hailing company, while Lyft is No. 2.

UBS analyst Eric Sheridan cut his price target for Uber’s shares to $32 from $56 while affirming a buy rating, The Fly reports. The coronavirus will put a major dent in the entire ride-sharing sector during the first and second quarters, he said in a report.

But Sheridan says the industry will rebound in Q3 and Q4. Long-term investors should think about buying Uber stock because it has a global presence and a wide range of products. The company should benefit from continuing changes in consumers’ approach to transport and food consumption, he said.

Wells Fargo Securities upgraded Uber to overweight, Bloomberg reports. Like UBS the firm favors Uber as a long-term play. Its value “remains tied to growth trends that will play out long after coronavirus-driven disruptions have subsided,” Wells Fargo analysts wrote in a commentary.

“Riders should continue to shift spending from personal-car ownership to ride-sharing” and Uber “should live to see the day.” Wells Fargo analysts also like Uber’s valuation after a 50% plunge from its February high.

UBS’s Sheridan slashed his price target for Lyft to $30 from $64 and maintained his buy rating, The Fly reports. 

The target reduction stems from his view that the industry will suffer in the first and second quarters. But he sees Lyft as attractive long term, just like Uber, as one of the two dominant players in the industry.

Uber shares at last check rose 9.4% to $22.42 while and Lyft was at $22.10, up 6.8%.