Uber Has Analyst Bullish Ahead of Wednesday's Earnings

Uber Technologies Inc UBER is set to report its first-quarter earnings on Wednesday afternoon. On Tuesday, one analyst said he is bullish on the stock but investors can expect a bumpy road to full recovery in 2021.

The Analyst: Bank of America analyst Justin Post reiterated his Buy rating and $71 price target for Uber.

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The Thesis: In his earnings preview, Post said he is expecting Uber to report better-than-expected first-quarter bookings but fall short of consensus revenue expectations.

Uber recently disclosed that average daily mobility bookings were up 9% month-over-month in March to a $30 billion run-rate, while its delivery run-rate for the month was $52 billion. Post said that update gives him more confidence that Uber’s U.S. mobility business will begin to inflect in the second quarter, followed by its Europe business in the third quarter as vaccine rollouts continue.

Another headwind for Uber in the near-term is reports of driver shortages. Post said driver supply will likely improve in the second half of 2021 as the world gets back to normal.

For now, Post said Uber’s latest mobility updates indicate the company is in a much better situation than it was just a few months ago.

“Although restaurant reopenings will likely stall delivery bookings growth, the strong Mobility recovery increases the likelihood for Uber to generate significant EBITDA in 2022, benefitting from high-profit mobility and a leaner, more focused business overall,” Post said.

Benzinga’s Take: Uber investors will be focusing on two primary questions in 2021. First, how quickly and how completely will mobility demand recover to pre-crisis levels. Second, how much of a potential negative impact will the economic reopening have on Uber’s delivery business.

(Photo: Uber)