Shares of Uber rose 2.3% to $41.09 a share on the heels of an upgrade to strong buy from buy by Angelo Zino, a senior equity analyst at CFRA, who is also keeping his price target at $48 a share.
The upgrade by CFRA comes amid a report by the Los Angeles Times that Uber is closing its Los Angeles office, laying off 80 employees amid belt tightening that has seen the ride-sharing company trim 1,000 jobs since going public last May.
Employees were told their jobs are being transferred to a "center of excellence" in Manilla, the paper reported, citing a recording made by one of the employees of the announcement by an Uber manager.
"In order to focus our resources in our largest customer support centers, we are closing the Uber support office in downtown Los Angeles," an Uber spokesperson said in a press statement.
CFRA's Zino, in upgrading his rating on Uber, noted the ride-sharing company already has reached its goal of 45% target margin on 25% of its bookings.
"We have higher conviction about the trajectory of the ridesharing market through '21 and better visibility toward adjusted EBITDA profitability," Zino wrote.
While noting the unprofitability of Uber Eats, the CFRA analyst said he was encouraged by signs of "greater operational efficiencies," a decision to move out of unprofitable regions, and the potential for industry consolidation, among other factors.
Zino also sees bookings growth of 20% for Uber in both 2020 and 2021.
"Potential upside from other bets and more stable spending on autonomy/strategic investments should bode well for profits/cash flow," the CFRA analyst noted.
Separately, 18 different hedge funds have at least 5% of their disclosed investments in Uber, led by Viking Global Investors, at $1.53 billion, Bloomberg reported.