Morgan Stanley Highlights Uber Inc. (UBER) and Lyft (LYFT) as Recovery Winners, PTs Raised

March 25, 2021 6:13 AM EDT
Get Alerts UBER Hot Sheet
Price: $59.23 -2.33%

Rating Summary:
    37 Buy, 7 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 18 | Down: 8 | New: 31
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Morgan Stanley analyst Brian Nowak reiterated an Overweight rating on Uber Inc. (NYSE: UBER) and Lyft (NASDAQ: LYFT) while raising the price targets to $75 and $65 from $70 and $60 as the recovery trade comes into focus.

The analyst stated "We continue to rely on rideshare usecase based modeling to gauge the slope of the recovery and remain bullish given: 1) An estimated ~60% of ’19 rideshare volumes came from a combination of social event/restaurants/bars and travel, 2) UBER/LYFT have both spoken to new users and use cases emerging during shelter-in (see here and here), and 3) UBER/LYFT's ~$1bn/$360mn of cost reductions in '20 are set to deliver flowthrough/free cash flow. We tie our travel forecasts to our rideshare models and model base case ’22 social/restaurant volumes to be 40%/45% higher than ’19. Despite modeling ’22 commute volumes to be 10% lower than ’19, UBER/LYFT '22 rides gross bookings still come in ~20%/25% above '19, due to recoveries in social and travel bookings. We remain significantly ahead of Street on
UBER/LYFT bookings and EBITDA, though prefer UBER due to more platform optionality and our view that UBER's multi product, global offering warrants a premium to LYFT's multiple (our ~6X UBER PT implied multiple is a ~30% premium to LYFT's ~4.7X PT implied multiple). We see ~40% upside to our UBER base case and ~80% upside to our bull case."

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 $52.85 yesterday.



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