Credit Suisse Bullish On Lyft: 'One Of The Most Attractive Return Profiles In Our Coverage Universe'

LYFT Inc. LYFT shares have dropped in price since the ride-hailing company's IPO, making the stock one of the most attractive on the market, Credit Suisse said in a bullish initiation Tuesday. 

The Analyst

Credit Suisse analyst Stephen Ju initiated coverage of Lyft with an Outperform rating and $95 target price.

The Thesis

Lyft shares have dropped more than 30 percent since the company’s much-hyped IPO, when the shares started out at $72 and quickly shot up to more than $88. It’s unlikely that the fundamentals have substantively changed in that time, Ju said in the initiation note. (See his track record here.) 

With a total addressable ride share market of nearly $750 billion, a penetration line that is still early and the promise of autonomous ride-hailing vehicles, the lower share price makes Lyft “one of the most attractive return profiles in our coverage universe,” the analyst said. 

A big part Credit Suisse's outlook for Lyft is tied to a bullish forecast for the overall sector.

“In the near- to medium-term, we believe ride-sharing will gain more rapid adoption in the denser, urban population centers in the U.S." 

Lyft's main competitor, Uber is in the process of going public, having filed earlier this month for an IPO with the goal of raising about $10 billion.

Price Action

Lyft shares were up 0.38 percent at $61.17 at the time of publication Tuesday.

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Photo courtesy of Lyft.