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Uber Stock Rises as Analysts Cut Targets but Affirm Fundamentals

While several analysts lowered their price targets on Uber, they maintained their buy ratings, based on strong fundamentals.
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Uber Technologies  (UBER) - Get Uber Technologies, Inc. Report shares on Thursday rose after Wednesday’s weak earnings report failed to dent analysts’ bullish long-term outlook for the ride-sharing and food-delivery company.

While several analysts lowered their price targets, they maintained their buy ratings, based on strong fundamentals for Uber.

The stock recently traded at $43.74, up 4.6%. It remains down 23% for the past six months.

J.P. Morgan analyst Doug Anmuth rates Uber overweight and trimmed his price target to $72 from $74. “We believe the sizable recent pullback creates a compelling long-term opportunity,” he wrote.

“Uber’s 2Q results disappointed on the surface, w/Ebitda loss far worse than the consensus. … But Uber significantly ramped driver investments in the second quarter … and the company is seeing the benefits into the third quarter, with mobility drivers in July up 50% from February.”

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Further, “Importantly, Uber believes its peak driver investment is behind, and it will taper incentives in August and September, as the marketplace continues to rebalance,” Anmuth said.

Wedbush analyst Daniel Ives has an outperform rating and cut his price target to $51 from $66.

“We continue to view mobility as a strong play on reopening and believe investors are underappreciating the transitory nature of the driver supply challenges, which should normalize and lead to a significantly stronger marketplace by the end of the year,” he wrote.

Oppenheimer analyst Jason Helfstein has an outperform rating and lowered his price target to $70 from $80. “Second-quarter results bolster our thesis that Uber is working more aggressively to alleviate the driver-supply headwinds than closest competitor Lyft  (LYFT) - Get Lyft Inc Class A Report,” he said.

Lyft shares at last check advanced 7% to $53.