Uber Analyst: Prop 22 Court Ruling A 'Sentiment Setback'

A California judge ruled Proposition 22, the state's gig worker law, as unconstitutional on Friday.

Although an appeal is imminent, the ruling is a “sentiment setback” both for the gig economy industry and Uber Technologies Inc UBER, according to BofA Securities.

The Uber Technologies Analyst: Justin Post maintained a Buy rating for Uber Technologies with a $64 price target. 

The Uber Technologies Takeaways: According to the LA Times, Uber could get a stay on the ruling soon, allowing time for consideration by the state court of appeals, Post said in the note.

“If the industry lost the appeal in lower courts, we think it would likely go to the California Supreme Court, a process that could take close to a year in total ... the outcome of any legal case, including any potential settlement or injunction, is inherently unpredictable,” he wrote further.

Many investors could feel optimistic about the appeal being successful.

“We also expect the rideshare industry to maintain business as usual throughout the appeal process in CA,” the analyst noted.

UBER Price Action: Shares of Uber Technologies were trading 2.58% higher at $40.96 at last check Monday. 

Posted In: BofA SecuritiesJustin Postride hailingRide SharingAnalyst ColorGovernmentRegulationsPrice TargetReiterationAnalyst Ratings

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.