Citigroup Upgrades Uber On Higher Revenue Projections

Citigroup upgraded Uber Technologies Inc UBER Monday, citing the potential for the stock to rise on better third quarter earnings.

The Analyst

Itay Michaeli upgraded Uber from Neutral to Buy and maintained a $45 price target.

The Thesis

Second-half revenue for the ridesharing pioneer is expected to accelerate, Michaeli said in the upgrade note, adding that the stock has been hampered by worries about a new California law that could turn gig workers into employees there — and by the lockup period from the company’s May IPO. (See the analyst's track record here.)

“While these overhangs will likely persist, we believe Q3 results could swing sentiment more favorable, as H2 revenue is expected to accelerate and as high level (California law) scenarios now appear better understood.”

Uber’s relative position on the potential for the move to autonomous vehicles has improved, and there may be potential profit opportunities from next-generation vehicles such as electric cars, according to Citi.

Price Action

Uber stock was was up 2.26% at $30.34 at the time of publication.

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Photo courtesy of Uber.