Investing.com -- Oppenheimer reiterated Uber Technologies (NYSE:UBER) as its best stock idea ahead of Q4 results.
The research firm believes that investor concerns surrounding the impact of Robotaxi technology have created an attractive entry point for the stock. Despite recent improvements in market sentiment, with Uber's shares up 11% year-to-date compared to Nasdaq’s 2% increase, investors remain cautious.
In a previous note, Oppenheimer said it views the Robotaxi as a potential market expander for Uber, assuming Tesla (NASDAQ:TSLA) does not monopolize the full self-driving space, with competitors like Waymo and Mobileye also in the fray.
The analysts expect that enthusiasm for Tesla's Robotaxi will wane if there's no significant progress in the next 12-18 months.
Meanwhile, they predict that Uber's consistent performance, especially in its Mobility segment, will likely propel the stock's value.
The firm has set a price target of $85 for Uber, based on a 16x multiple of the company's projected 2026 EBITDA, which is slightly above the peer group average and reflects an anticipated faster growth rate.
Key points driving Oppenheimer's bullishness include its view that the negative sentiment on Robotaxi is overblown, with only a muted impact on Uber's stock from recent Robotaxi developments.
Moreover, Uber’s partnership with Waymo is reportedly progressing well, with the former effectively matching supply and demand in several cities, and there is potential for expansion into additional markets.
“Overtime we expect investors will gain confidence UBER's AV strategy is working,” analysts led by Jason Helfstein noted.
In the US Mobility sector, Uber is expected to regain market share lost to competitors by adapting faster to insurance cost changes and by implementing more aggressive incentives.
Uber's rides growth in the fourth quarter is projected to be similar to the third quarter, with moderate pricing growth indicating healthy expansion.
Delivery services are also showing positive trends, with Oppenheimer forecasting a year-over-year growth that surpasses the Street's expectations for the fourth quarter and beyond.