Uber stock falls after Melius downgrade to Sell

Investing.com -- Uber Technologies Inc. (NYSE: UBER) stock fell 1.2% Monday morning following a downgrade from Melius Research to Sell from Hold, with a price target of $73 that suggests further downside from the recent closing price of $81.71.

Analyst Conor Cunningham cited increased competition risks as the primary reason for the downgrade. Despite acknowledging Uber’s leadership position in global rideshare and delivery services, Cunningham expressed concern about the company’s vulnerability to competitive pressures.

"Uber is very clearly the leader in global rideshare and delivery. But given that position, Uber has the most risk from increased competition," Cunningham wrote in his research note. He specifically highlighted autonomous vehicle (AV) competition set to intensify in 2026 and beyond, which could potentially erode returns regardless of Uber’s partnerships in the space.

The analyst noted that while Uber has positioned itself as a demand aggregator for new AV entrants through partnerships and investments, the company faces significant risks from the evolving competitive landscape.

Cunningham also pointed out that Uber’s current valuation, while appearing cheap, assumes steady-state growth without accounting for potential competitive disruptions. He suggested that growth moderation or further standalone expansion announcements from companies like Waymo and Tesla in the U.S. market could pose risks that aren’t fully reflected in the current stock price.

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