Uber stock target raised at Loop on improving AV sentiment

Investing.com -- Loop Capital raised its price target for Uber (NYSE:UBER) to $105 from $89 per share on Wednesday, highlighting stronger earnings estimates and growing investor confidence in the company’s long-term positioning within the autonomous vehicle (AV) landscape.

“We are updating estimates and raising our PT to $105… on higher estimates and a return to 20X adj. EBITDA as our valuation target,” Loop Capital analysts wrote. 

The firm reiterated its Buy rating on Uber, highlighting “consistently strong trip volume growth” and the company’s “highly levered and asset-light business model” as drivers of “outsized profit and free-cash-flow growth.”

A key factor in the revised target is said to be a shift in investor sentiment toward autonomous vehicles and their role in Uber’s future. 

“Investor sentiment around the long-term impact of robotaxis on Uber’s rideshare dominance has been tilting more constructive,” Loop Capital noted. 

According to the firm, leading AV providers are increasingly aligning their strategies with Uber’s platform, validating Uber’s position as a central player in the space.

“We are not surprised at all,” the analysts added. “Our view has always been that Uber is naturally the partner of choice for tech innovators and fleet operators, bringing the largest pool of existing demand outside of China.”

Loop Capital also highlighted strength in Uber’s deliveries segment, pointing to positive trends beyond traditional restaurant orders. 

“We see a strong backdrop for the deliveries segment with acceleration in non-restaurant order value, inflection to positive contribution and high margin contribution from a burgeoning advertising business,” the firm said.