Mizuho initiates Uber stock coverage with Outperform rating, $130 target

Investing.com - Mizuho initiated coverage on Uber Inc. (NYSE:UBER) with an Outperform rating and a $130 price target on Monday. The stock, currently trading at $99.57 and near its 52-week high of $101.99, has earned a "GREAT" financial health rating according to InvestingPro analysis.

The investment firm forecasts Uber will be a "multi-year compounder" with a 2025-2028 compound annual growth rate (CAGR) of 15% for revenue, 16% for gross profit, and 25% for GAAP earnings per share. The company has already demonstrated strong growth, generating $47.33 billion in revenue over the last twelve months.

Mizuho highlighted Uber’s profitability transformation, noting the company moved from negative EBIT margins in 2021 to positive 6% in 2024, with projections reaching 15.5% by 2027, representing approximately $10.8 billion in EBIT.

The firm expects Uber to generate $8.8 billion in free cash flow this year, increasing to $13 billion by 2027, which would represent a 4.5% free cash flow yield.

Mizuho also noted Uber’s recently authorized $20 billion share buyback program, which represents approximately 10% of the company’s market capitalization, adding that Uber spent 67% of its free cash flow on repurchases in the first half of 2025.

In other recent news, Aldi has partnered with Uber Technologies to offer grocery delivery through the Uber Eats platform, marking the first time a retailer on Uber Eats accepts SNAP-EBT payments nationwide. This collaboration brings over 2,500 Aldi locations to the app for on-demand or scheduled delivery. Meanwhile, Lucid Group has delivered its first robotaxi engineering vehicle to Nuro, initiating a partnership with Uber and Nuro to develop a robotaxi service. This venture includes Uber’s $300 million investment in Lucid, with plans to deploy 20,000 Lucid Gravity electric SUVs by late 2026. Lyft’s stock price target was raised to $26 from $20 by Benchmark following its partnership with autonomous vehicle company Waymo, which Benchmark described as significant for challenging Uber’s dominance in the space. Additionally, Uber has announced a strategic partnership with Flytrex to launch drone delivery for Uber Eats, with pilot programs expected by the end of 2025. Designer Brands, the parent company of DSW, has also partnered with Uber Eats to offer footwear and accessories from nearly 500 DSW stores for delivery, allowing customers to shop brands like Steve Madden and Adidas directly through the app.

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