Uber Technologies (UBER) - Get Uber Technologies, Inc. Report shares accelerated Thursday after analysts at UBS named the ride-hailing giant one of their top stock picks and said they expect the company's shares could more than double from current levels.
Shares of Uber were up 2.92% at $37.07 in premarket trading following the report from the influential investment bank.
Uber shares have been under pressure following the ride-hailing giant’s posting of its first operating profit as a public company, which still came with a significant net loss due to its investment in China-based ride-sharing company Didi Global (DIDI) - Get DiDi Global Inc. Report.
Uber said adjusted profit for the third quarter came in at a modest $8 million, enough to put it in the black for the first time, but the net loss and a tepid fourth-quarter outlook kept shares in the red. On a per-share basis, Uber lost $1.28 a share; analysts polled by FactSet had been expecting a loss of 33 cents a share.
Didi, which went public in June, saw its market capitalization drop by billions of dollarsafter China’s market regulator launched an anti-trust probe. More recent concerns about the Covid-19 Omicron variant and another drop-off in potential ridership also have weighed on Uber’s share price.
Separately, UBS on Thursday raised its price target on Google parent Alphabet (GOOGL) - Get Alphabet Inc. Class A Report, saying the tech giant’s tock has the potential to jump another 40% over the next 12 months or sooner.
UBS earlier this month unveiled several of its high-conviction picks that it views as “strong pricing power stocks” -- those able to raise prices on products and that have solid margin momentum. The short list includes Apple (AAPL) - Get Apple Inc. Report, Nike (NKE) - Get NIKE, Inc. Class B Report and Salesforce (CRM) - Get salesforce.com, inc. Report, among others.