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A Raymond James analyst upgraded shares of Uber (NYSE:UBER) to Outperform from Market Perform on Wednesday, establishing a $38 per share price target.
The analyst upgraded the stock following the company’s “strong 2Q results and outlook.”
“Our upgrade is based on: 1) Continued Mobility momentum with bookings increasing 57% y/y FXN and 25% q/q and Uber expects continued strength in 2H; 2) Uber is demonstrating strong EBITDA leverage from both the volume recovery as well as increasing operational efficiencies. Uber remains confident in its $5B EBITDA target for FY24 and FCF is expected to perform better vs. previous expectations. 3) We believe valuation remains attractive at ~4x 2023 EV/GP and continued bookings strength and leverage should drive continued multiple improvement,” the analyst wrote in a research note.
Uber shares gained 18.9% on Tuesday following the earnings release. It has climbed another 4% during Wednesday’s session.
“Mobility gross bookings increased 57% y/y FXN in 2Q (vs. 62% y/y in 1Q) and 25% q/q and 3% above our estimate. Uber noted the mobility recovery has been broad based on a global basis, particularly for travel use cases. Uber for Business has doubled y/y for instance. The one area that has lagged is the West Coast where the recovery is still trailing. Overall, Uber expects trends to continue to improve in 2H,” added the analyst.
