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Uber's a Top Reopening Play: Jefferies

Stock MarketsApr 01, 2021 11:48AM ET
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By Christiana Sciaudone

Investing.com --  Uber (NYSE:UBER) jumped more than 3% after Jefferies (NYSE:JEF) called it a top reopening play. 

Jefferies analyst Brent Thill initiated the coverage with a buy rating and $75 price target, slightly higher than the average price target of around $72.50. The stock has 27 buy ratings, three holds and no sells.

The ride hailing company looks poised to accelerate growth and reach profitability on mobility and delivery, with the former expected to jump this year, StreetInsider reported Thill as saying. 

The pandemic was terrific for delivery and terrible for mobility, with offices, bars and restaurants shut down to stem the spread of the coronavirus. For the fourth quarter, mobility sales dropped 52% compared to a year earlier, while delivery jumped 224%. Overall revenue declined 16% from the fourth quarter of 2019, the company said in a statement in February.

Thill sees mobility bookings up 24% this year, after a 46% drop last year, with even better results coming next year and the year after. The delivery segment will also benefit, set to double by 2022.  

“Ordering habits from COVID days should persist, even if some cohorts reduce average order size or frequency," Thill said. "Offsetting factors include the return of work meal deliveries, additional opportunities, such as groceries, alcohol and package delivery, and high-margin advertising."

And then there are Uber's stakes. Its investment portfolio is valued at about $13 billion, including Didi (15% stake), Grab (16%), Yandex (NASDAQ:YNDX).Taxi (35%), Zomato (10%), Lime (32%), Aurora (26%) and Joby (unknown).

 

Uber's a Top Reopening Play: Jefferies
 

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