Uber Technologies has agreed to divest its self-driving unit, Advanced Technologies Group (ATG) to rival start-up Aurora Innovation. Though the ride-hailing giant did not disclose the financial terms of the deal, Reuters has learnt that the deal is valued at about $4 billion. The companies expect the transaction to close in the first quarter of 2021.
Uber’s (UBER) decided to offload its ATG unit as part of a move to focus on profitability by the end of 2021. Uber’s CEO Dara Khosrowshahi told Reuters in an interview, “This essentially advances our path to profitability.”
Following the sale, Uber and ATG investors are expected to collectively hold a 40% ownership interest in Aurora. Uber would own a 26% stake in the start-up. As part of the deal, Uber will also invest $400 million in Aurora.
Uber said in a regulatory filing that, “at the closing of the transactions, the Company and Aurora will enter into a collaboration agreement pursuant to which they will collaborate with respect to the launch and commercialization of self-driving vehicles on the Company’s ridesharing network.” (See UBER stock analysis on TipRanks)
On Dec. 3, Citigroup analyst Itay Michaeli raised the stock’s price target to $60 (11.5% upside potential) from $40 and maintained a Buy rating. The analyst believes that the company has the potential to deliver higher earnings. He said that the company’s risk/rewards remain attractive, even though the stock has performed well lately. Shares have rallied about 81% year-to-date.
Meanwhile, the rest of the Street shares Citigroup’s bullish outlook on the stock. The Strong Buy analyst consensus is based on 19 Buys and 2 Holds. The average price target stands at $53.65 and implies that the shares are fully priced at current levels.
Related News:
Uber Posts Worse-Than-Feared Loss On Weak Rides Demand; Wedbush Raises PT
Rexnord Snaps Up Hadrian; Expands Its Washroom Solutions Business
NortonLifeLock To Snap Up Avira For $360M; Baird Sticks To Buy
