Morgan Stanley's 6 Pack of Drizly Benefits to Uber Inc. (UBER)

Morgan Stanley analyst Brian Nowak reiterated an Overweight rating and $68.00 price target on Uber Inc. (NYSE: UBER) noting 6 reasons the Drizly acquisition is important for the company.

1) Large TAM with low but inflecting online adoption. The $120bn of US Consumer alcohol spendis only 2% penetrated online

2) Accelerating push into last mile delivery increases Uber’s addressable market, driving higher user retention and frequency as well as increasing subscription product uptake.

3) Scale merchant selection faster Drizly’s reported 3,300 local merchant partnerships in 235 markets will help Uber scale this business faster.

The analyst stated "Drizly's marketplace will be available through both integration with the Uber Eats app and through its own separate Drizly app. The deal is expected to close within 1H:21. We estimate the deal to be priced at 1.5-2X '21 GMV."

4) Int'l expansion as Sensor Tower estimates Drizly has only ~400k monthly active users in the
US vs the reported ~80mn globally on Uber.

5) Drizly's partnerships with producers open the door for advertising partnerships

6) Profitable growth as it likely helps EBITDA break even sooner than expected

For an analyst ratings summary and ratings history on Uber Inc. click here. For more ratings news on Uber Inc. click here.

Shares of Uber Inc. closed at $57.09 yesterday.

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