Proactive Investors - Uber Technologies Inc (NYSE:UBER) shares are up over 70% so far for 2023 and analysts at Oppenheimer think the transportation app has further to go.
They’ve maintained their ‘Outperform’ rating on the company while increasing their 12-18 month price target to $65 from $55, citing higher peer valuations and increased confidence in the consumer tailwinds that are driving the stock.
“We believe Uber will continue to benefit from a spending shift from goods to services normalizing, exposure to the strongest consumer categories, and return-to-work tailwinds,” the analysts wrote in a note on Tuesday.
The analysts highlighted a 19% increase in bookings in the first quarter of Uber’s 2023 financial year, with the company guiding for growth of 15% in 2Q as it is positively exposed to favorable consumer spending on travel and restaurants - as well as customers having their meals delivered to their homes.
Consumer weakness in other categories like building materials, furniture, electronics and clothing don’t affect Uber they added.
“We believe Uber is also positively exposed to a higher-end consumer less impacted by inflation,” the analysts said.
Other tailwinds include an ongoing shift in spending from goods to services and more workers returning to the office, particularly as more technology companies require employees back to the workplace.
Finally, the Oppenheimer analysts expect Uber to make it onto the S&P 500, as soon as December, after reporting expected GAAP profitability in 3Q 2023.
Index inclusion generally increases demand for a stock, forcing mutual fund and index buying, they noted.
Uber’s shares traded 2.4% higher at $43.17 by mid-morning on Wednesday.