Mitigating risk and/ or exposure to COVID-19-related forces is necessary in these uncertain times. Social mobility may increase or decrease with the ebbs and flows of the ongoing pandemic, and naturally, this dramatically affects business trends. While Uber Technologies, Inc. (UBER) is predominantly dependent on people going from place to place, its delivery service acts as a hedge against those who wish to stay home. The tech company is expected to release earnings after market hours today, August 4. (See Uber stock charts on TipRanks)
Reporting his estimates on the previous and future quarter is Justin Post of Bank of America, who wrote that “although Delta variant will be a risk for 3Q, ultimately Uber is hedged with a Delivery business that would benefit from mobility restrictions.”
Post reiterated a Buy rating on the stock, and declared a price target of $71. This target represents a possible 12-month upside of 65.93%.
The five-star analyst explained that Uber is seeing its booking trends increase with the current recovery of social mobility, and that in general, U.S. transit activity has returned to 99% of its pre-COVID state.
Despite driver supply improving over the last month, the company is still experiencing abnormally high wait times for pick-ups. For example, in San Francisco, wait times were 30% longer in July than they were in June. Post mentioned that Uber CEO Dara Khosroshahi had remarked that “Uber is ‘leaning in and investing super-aggressively to bringing drivers back.’”
Beyond wait times, Uber has been involved in several notable negative press headlines, including those related to its equity position in the embroiled DiDi Global (DIDI), Softbank (SBTBF) selling Uber stock, competition with Lyft (LYFT), and elevated ride prices. Still, the analyst expects profitability in the third and fourth quarters.
On TipRanks, UBER has an analyst rating consensus of Strong Buy, based on 20 Buy and 4 Hold ratings. The average Uber price target is $72.30, suggesting a possible 12-month upside of 68.96%. UBER closed trading Tuesday at a price of $42.79 per share.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
