The Uber share price could double, Barclays Capital says
Analysts at Barclays Capital think the Uber share price could double over the next year as the ride-hailing company looks to become profitable.
Uber could see its share price double over the next year, according to analysts at Barclays Capital.
The bank, which issued a $40 target price for the stock, told investors that it believes the stock could trade as high as $54 as the company attempts to become profitable.
‘We see the overhang around the lock-up expiration diminishing going forward, and 4Q19 results are likely to be more impressive than 3Q on the bottom line,’ Barclays Capital analysts said in a note to investors last week.
‘This cocktail should produce outsized returns for those willing to take the extreme risk,’ the analysts added.
Based on Uber closing at $26.75 on Monday, analysts at Barclays Capital believe that the ride-hailing company has a potential upside of between 49.5% to 101%.
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Uber shares fall well below IPO price
Investors in Uber will welcome Barclays optimism considering that the stock has fallen well below its IPO price of $41.57, with it currently trading 35% below that level.
Analysts and investors are hoping that the company’s other business lines like Uber Eats and its freight delivery platform will help drive sales growth next year and assist it in reaching profitability.
The company has a long way to go though, with Uber recording a $1 billion loss in its third quarter.
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Barclays Capital says restructuring needed for Uber to reach profitability
Analysts at Barclays Capital laid out a blueprint for Uber to follow in order to help it reach profitability.
The bank argued that the company should combine its Uber Eats business with another company and significantly rollback its operations in India, a move that would ‘meaningfully change the profitability outlook and the stock narrative’.
‘Food delivery and ride-hailing in duopoly market structures can be very profitable, like travel, and we think Uber is one catalyst away from the market realising it,’ the analysts added.
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