Jefferies adds Uber to 'Franchise Picks' as bullish setup strengthens

Investing.com -- Jefferies elevated Uber to a "Franchise Pick" and raised its price target on the stock to $110 from $100 per share in a note Monday, saying the setup for the ride-hailing and delivery company looks increasingly bullish following strong earnings and investor meetings.

Analyst John Colantuoni revealed that the firm hosted CEO Dara Khosrowshahi and CFO Balaji Krishnamurthy, and that "a bullish story is crystallizing for 2027" as Uber delivers sustainable bookings growth and makes progress scaling U.S. autonomous vehicle operations.

Colantuoni told clients that Uber's management emphasized confidence in sustaining recent bookings growth "for the foreseeable future," with third-quarter guidance implying a fifth straight quarter of roughly 20% growth across delivery, mobility and geographies.

He noted the growth is being driven predominantly by audience gains as Uber launches in underpenetrated markets and leverages Uber One to drive frequency, adding that growth should remain strong "even if audience contribution moderates," given room for frequency and price to increase.

On autonomous vehicles, Jefferies expects Uber to "increasingly illustrate an ability to scale US AVs," initially by removing safety drivers in 2027 before expanding in 2028. Uber plans to invest more than $10 billion in AVs, with the majority tied to about 120,000 vehicle commitments, before transitioning to an asset-light third-party model.

The firm added that progress on AVs should drive Uber's multiple higher, noting the stock trades at a near-record discount of about 50% to DoorDash despite peer-leading growth.

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