Uber Analyst Says Sentiment Could Shift For Ride Share Giant

Ride-hailing company Uber Technologies Inc UBER introduced a new platform Thursday that creates an opportunity for sentiment to "shift from pessimism to optimism," according to Raymond James.

The Analyst

Justin Patterson maintained an Outperform rating on Uber with an unchanged $54 price target.

The Thesis

Uber CEO Dara Khosrowshahi said Thursday the company will merge its ride-hailing and food ordering apps, introduce new safety features  and promote alternate modes of transportation.

The overall takeaway is that the company is embracing cross-selling initiatives, and management is listening to concerns from a safety standpoint and earnings concerns from drivers and couriers, Patterson said in a Friday note. (See his track record here.) 

The bullish case for Uber's stock requires that investments in its delivery network and marketing can be leveraged across the entire business, the analyst said. 

The company showed Thursday it is "moving more aggressively" toward this goal so it can take full advantage of cross-selling opportunities, he said. 

At the very least, Uber is raising awareness of its products in a cost-friendly way that is supportive of margins, Patterson said.

At the same time, the company is distancing itself from the competitive landscape, the analyst said. 

Uber's new platform will be tested and over the coming months, and could bolster the case for improved investor sentiment, according to Raymond James. 

Benzinga's Take: Uber has warned investors it may never be profitable, and merging two apps into one might not be the ultimate solution.

Do you agree with this take? Email feedback@benzinga.com with your thoughts.

Related Links:

The Last 30 Days Were No Picnic For Uber, Lyft

Uber Backer Bradley Task Talks California Legislation