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Wedbush Adds Uber To 'Best Ideas List,' Sees Upside To $50

Uber Technologies Inc (NYSE: UBER) investors who bought at the IPO have been living through a "nightmare," but the "dark clouds" are starting to clear, according to Wedbush.

Benzinga · 02/03/2020 14:26

Uber Technologies Inc (NYSE: UBER) investors who bought at the IPO have been living through a "nightmare," but the "dark clouds" are starting to clear, according to Wedbush.

The Uber Analysts

Ygal Arounian and Daniel Ives added Uber's stock to Wedbush's "Best Ideas List" with a price target lifted from $45 to $50.

The Uber Thesis

Uber's earnings report on Thursday could mark a turning point as the ride-hailing company's quarter is likely to come in better than expected. The analysts said encouraging 2020 guidance from Uber could restore "Street credibility."

The company has recently taken a close look at its domestic and international business, especially Uber Eats who is forced to compete in the competitive landscape, the analysts wrote in a note. Recent moves to bolster the business include the sale of its India Eats business to Zomato and this could be seen as "one step in a broader strategy" over the next six to 12 months.

Meanwhile, the analysts said uncertainty related to California's law to classify Uber drivers as employees represents an overhang for the entire gig economy. While the ultimate outcome remains unclear, the research firm's deep-dive into the law in its current form "will not be enacted." The more likely outcome will be a "much more moderate/less draconian" legislation in 2021.

Uber's Price Action

Shares of Uber were trading higher by 1.3% to $36.77 at time of publication.

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