On Friday, Citi maintained its Buy rating on Uber Inc. (NYSE:UBER) with a consistent price target of $98.00. The endorsement follows a series of investor meetings with Uber's CEO, Dara Khosrowshahi, in Boston, which left the firm with a positive outlook on the company's stock. Citi highlighted the potential for growth in Uber's Mobility and Delivery Gross Bookings (GBs) and the evolving autonomous vehicle (AV) strategy as key factors.
The discussions around Uber's AV initiatives were a focal point, and Citi expressed confidence that Uber's Mobility services could achieve high utilization rates for AV networks. The firm anticipates that the addition of value-added services could enhance Uber's AV partnerships. Moreover, Citi underscored the robust performance of Uber's core and emerging Mobility use cases, including the promise of improved reliability and demand in suburban areas.
Citi also pointed to a 17% growth in U.S. Mobility GBs during the third quarter as a sign of Uber's continuing strength. Other significant topics from the meetings included pricing strategies, advertising strength, and the company's approach to capital allocation. With Uber's shares trading at approximately 14 times Citi's estimated 2026 EV/EBITDA, the firm considers the risk/reward balance favorable and reaffirms its Buy rating and $98 price target.
In other recent news, Uber has been the focal point of several significant developments. The company's third-quarter earnings report showcased a robust performance, with the EBITDA reaching $1.69 billion, surpassing expectations. A noteworthy 80% increase in advertising revenues was also reported. Uber's Delivery services grew by 17%, and the Uber One subscription service saw a significant year-over-year increase, reaching over 25 million members.
Loop Capital, DA Davidson, Seaport Global Securities, Goldman Sachs, BofA Securities, and Evercore ISI all maintained a positive outlook on Uber, with various adjustments to their price targets. In a landmark decision, Massachusetts voters passed a measure allowing ride-share drivers from companies such as Uber to form unions, making Massachusetts the first U.S. state to allow such collective bargaining.
InvestingPro Insights
Complementing Citi's bullish stance on Uber, InvestingPro data reveals that the company's market capitalization stands at $150.43 billion, reflecting its significant presence in the ground transportation industry. Uber's revenue growth remains strong, with a 20.4% increase in the most recent quarter, aligning with Citi's observations on the company's robust performance.
InvestingPro Tips highlight that Uber's net income is expected to grow this year, supporting the positive outlook on the company's financial trajectory. Additionally, Uber is trading at a low P/E ratio relative to its near-term earnings growth, which could indicate potential upside for investors, in line with Citi's favorable risk/reward assessment.
It's worth noting that InvestingPro offers 13 additional tips for Uber, providing investors with a comprehensive analysis of the company's financial health and market position. These insights can be particularly valuable when considering Citi's price target and the evolving landscape of Uber's business segments, including its autonomous vehicle strategy.
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