Top Pick Uber Poised For Growth, While Lyft And Doordash Hold Steady: Sector Analysis

Wells Fargo has started its coverage of the large cap internet sector by assigning an Overweight rating to UBER Technologies, Inc. UBER, while providing Equalweight ratings for Lyft, Inc. LYFT and Doordash, Inc. DASH.

A team of equity analysts, led by Ken Gawrelsky, at the U.S. bank recently released a note predicting an increasing stabilization in competitive dynamics within the rideshare/delivery subsector in 2023/24.

Wells Fargo is Bullish On UBER

Wells Fargo is considering UBER as a top pick within its industry, predicting that global competitors will retreat owing to regulatory problems (such as Didi) or a difficult funding climate for private enterprises. In addition, UBER’s high-margin ad business is growing, pushing 2024 EBITDA to exceed market expectations, according to Wells Fargo, potentially leading to the stock’s outperformance if consensus aligns with their estimates.

The bank has set a price target of $50 on UBER stock, representing a 24% increase from current levels.

Read now: Uber Technologies Stock UBER, Analyst Ratings, Price Targets, Predictions

Analysts Neutral On DASH and LYFT

Wells Fargo maintain an Equalweight recommendation on LYFT and DASH. Analysts placed a $9 price target on LYFT stock, effectively implying a 13% downside from current levels. Well Fargo’s price target on DASH ($70) is marginally lower by 2% compared to market prices.

Chart: UBER, DASH, LYFT Price Performance Year To Date

UBER shares have climbed 59% year to date as of June 8, compared to a 46.7% gain for DASH and a 5.9% loss for LYFT.

In terms of forward P/E ratios, UBER trades at 73 times its estimated next 12-month earnings, whereas DASH trades at 60 times, according to Benzinga Pro data.

Read also: Billionaire CEO Of OpenAI Uses UberX To Get Around Town And Maximize His Time

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