Uber Technologies announced on Friday that its wholly-owned trucking logistics arm – Uber Freight – has received a $500 million preferred stock investment from a group led by Greenbriar Equity. According to the ride hailing and food delivery company, the deal values the subsidiary unit at $3.3 billion on a post-money basis.
Uber (UBER) intends to use the investment proceeds to build out its logistics platform and speed up product innovations. As part of the transaction, Greenbriar Managing Partners Michael Weiss and Jill Raker will join the Uber Freight board. Uber stated that it will continue to maintain majority ownership in the logistics arm.
Head of Uber Freight, Lior Ron said, “We are thrilled to be moving into the next chapter with Greenbriar by our side as a partner with deep expertise and a shared passion for simplifying logistics. We will continue to leverage Uber’s leading marketplace technology, global reach, and cross-platform capabilities to accelerate our growth and continue to lead the industry forward.” (See UBER stock analysis on TipRanks)
On Sept 15, Wells Fargo analyst Brian Fitzgerald reiterated a Buy rating and a price target of $48 (27.3% upside potential) on the stock following a three day virtual meeting with Uber’s Investor Relations team.
Fitzgerald pointed out several positives from the meeting, including mobility recoveries across geographies, elevated meal delivery growth through August, and increase in subscription services to lower marketing costs. The analyst said, “We think Uber’s strong capital position and variable cost structure will limit the risk of insolvency during an economic downcycle.”
Currently, the Street has a bullish outlook on the stock. The Strong Buy analyst consensus is based on 22 Buys and 3 Holds. With shares up nearly 27% year-to-date, the average price target of $41.86 implies a further upside potential of about 11% to current levels.
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