Uber Analyst Lowers Estimates Ahead Of Q1 Report, But Says Crisis Will Strengthen Competitive Position

Uber Technologies Inc UBER is scheduled to report first-quarter earnings on May 7.

The company has withdrawn its 2020 guidance and is likely to have a slower recovery than was previously anticipated, according to BofA Securities.

The Uber Analyst

Justin Post maintained a Buy rating on Uber Technologies and reduced the price target from $42 to $40.

The Uber Thesis

The estimates for ride bookings have been reduced again, as the impact of quarantines on western markets is likely to be “larger and longer” than in Asian markets that were affected by the virus earlier, Post said in a Friday note. (See his track record here.)

BofA's estimates now incorporate a decline in ride bookings of 79% year-on-year in the second quarter, of 55% in the third quarter and of 18% in the fourth quarter.

Uber plans to mark down its minority stakes in various companies, including DiDi, Grab and Yandex, resulting in a GAAP net loss of between $1.9 billion and $2.2 billion in the first quarter, the analyst said. 

Uber is likely to reiterate the variable cost nature of the business and the company's strong liquidity position, “with some cautious optimism on data on China rides recovery and traction for delivery business beyond just Eats,” Post said. 

The crisis could strengthen Uber’s competitive position, the analyst said, naming it the top pick among transportation peers.  

UBER Price Action

Uber shares were trading 2.37% higher at $27.68 at the time of publication Friday. 

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Photo courtesy of Uber.