Lyft (LYFT) PT Lowered to $40 at Morgan Stanley on Increased Driver Incentives

Morgan Stanley analyst Brian Nowak lowered the price target on Lyft (NASDAQ: LYFT) to $40.00 (from $64.00) as the company plays catch up to UBER's driver incentives.

The analyst reiterated an Equalweight rating, stating "we lower LYFT ‘22/’23 EBITDA by 47%/14% as we take into account higher driver incentives (contra revenue) of ~$2.30/$0.86 per ride in '22/'23 (vs previously modeled $0.50/$0.36 per ride) as LYFT ramps supply on the platform as well as has higher opex. We apply a 35% discount to the regression implied ’25 EBITDA multiple for LYFT, which results in a PT of $40 (implied 2.4x ’23 Revenue). Our $40 PT means LYFT is valued at a discount to the median of our low margin peers on a revenue and margin adjusted multiple basis which we think is warranted given LYFT's smaller scale, single product and single geography offering."

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