Uber's (NYSE: UBER) share price has risen more than 2% premarket after the stock was upgraded to Overweight from Neutral by Piper Sandler.
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The rise adds to the stock's over 3% gain on Friday and over 8% increase in the last week, putting in a solid start to 2023.
Piper Sandler analyst Alexander Potter also raised the firm's price target on the stock to $33 from $31 in a research note.
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The analyst told investors he recommends pairing Uber against DoorDash, which he downgraded from Neutral to Underweight.
Potter noted that vehicle prices are near all-time highs, and a quick reversal to historical pricing seems unlikely. As a result, he believes “cash-strapped” consumers are increasingly likely to opt to hail rides instead of trying to replace old cars.
Last week, Mizuho picked Uber as one of its top picks for 2023, stating that unit economics are favorable for ridesharing in the US.
Analysts at Mizuho stated in a research note that Uber is the “category leader” and is also “positioned to gain share on more rational competition.”
They also noted that the ridesharing company has been “aggressively reducing fixed costs” and is managing its business to optimize EBITDA.
According to TipRanks, out of 13 analysts have a Buy rating on Uber, with the average price target of $47.65 representing a potential 80.5% upside in the shares.
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