Lyft Faces Growing Competition, Bank of America Analyst Warns

Lyft, Inc. LYFT shares are moving lower on Monday. Bank of America analyst Micheal McGovern maintained a Buy rating on the company and lowered the price target from $21 to $19.

What To Know: In his note, the analyst highlighted three key developments: Waymo’s expansion of testing in Los Angeles, Uber’s new price lock feature and the recent appointment of Sean Duffy as Transportation Secretary.

McGovern stated that Waymo has initiated testing of its autonomous ride service on Los Angeles freeways. The company received approval for this in March, along with permission to conduct similar testing in San Francisco, which began in August.

The analyst views Waymo’s latest update as potentially negative for Lyft. This development could be seen as a threat to traditional ride-share services like Lyft, as autonomous ride services may compete for customers.

Bloomberg reported that Uber is creating a “price lock pass,” allowing customers to pay $2.99 to secure pricing for a specific route for a one-hour window each day. McGovern noted that if Uber rolls out this feature, it could intensify competition between the two companies.

Lyft introduced its own price lock feature in August and has seen significant success, selling over 200,000 passes in just a few months.

Lastly, the Bank of America analyst views Duffy’s confirmation as Transportation Secretary as a positive development for Lyft. Duffy has been a proponent of a federal framework for regulating autonomous vehicles, rather than leaving it to individual states.

Lyft is expected to release 2024 fiscal-year fourth-quarter earnings on February 11 after the market closes. Analysts estimate earnings per share of 21 cents and revenue of $1.55 billion.

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LYFT Price Action: At the time of writing, Lyft stock is trading 3.98% lower at $13.41, according to data from Benzinga Pro.

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