Lyft CEO change ‘opens the door’ for potential buyout, says Deutsche Bank

Deutsche Bank analyst Benjamin Black keeps a Hold rating on Lyft (LYFT) with a $12 price target after the company announced that board member David Risher will become the new CEO on April 17. Risher has over 30 years of management experience, including as head of product and head of U.S. Retail at Amazon until 2002 and prior to that, as a general manager at Microsoft, the analyst tells investors in a research note. The firm anticipates Risher will take a fresh look at Lyft’s strategic direction, its cost structure, and its go-to-market strategy, but says it remains unclear if new management "will be sufficient to counteract some of the durable advantages" Uber (UBER) has within U.S. rideshare. However, Deutsche would not be surprised if the company announced "yet another large-scale cost-saving initiative to offset both recent and upcoming insurance inflation." In addition, the CEO change "opens the door for a potential acquisition and/or significant partnership," given that the co-founders have relinquished management responsibilities and a new CEO may be open to exploring new opportunities, writes the firm.