Uber cut at JMP Securities as rideshare transitions to AVs

Investing.com -- JMP Securities downgraded Uber Technologies (NYSE:UBER ) from Market Outperform to Market Perform, maintaining a $95 per share price target on the stock, citing the growing influence of autonomous vehicles (AVs) in the rideshare market. 

According to JMP analysts, the transition poses both opportunities and challenges for Uber, with execution risk looming as the company adapts to a hybrid model of first-party (1P) and third-party (3P) AV marketplaces.

“We believe AVs offer consumers a better experience,” JMP noted, emphasizing the rapid progress of competitors like Waymo. 

“Waymo is blitzscaling and has nearly unlimited access to capital given the size and potential of the AV ride-share market,” said the firm. 

JMP Securities believes that while Waymo’s current scale is too small to significantly disrupt Uber’s results in the near term, Uber’s valuation could face limitations until it demonstrates a clear strategy for managing the AV shift.

Adding to the pressure is said to be the anticipated regulatory framework for AVs, which could arrive as early as 2025. 

JMP highlighted that such regulations may favor other players in the space, particularly Tesla (NASDAQ:TSLA ). 

“We want to see greater clarity on how Uber manages this technology transition before becoming more positive again, and see shares as fairly valued,” the analysts explained.

While JMP acknowledges Uber’s leadership in traditional ridesharing, the rise of AVs has created uncertainty. 

The firm views Uber’s current position as stable but limited by its ability to navigate this evolving landscape.

 

Source: Investing.com