Uber Technologies Inc (NYSE:UBER, ETR:UT8) Soars to All-Time High After Tesla's Robotaxi Event

October 13, 2024 09:46 PM PDT | By Team Kalkine Media

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Uber Technologies Inc (NYSE:UBER, ETR:UT8) Soars to All-Time High After Tesla's Robotaxi Event — Image source: Shutterstock

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Highlights:

Uber shares hit an all-time high, climbing 9.6% to around USD85.40 post-Tesla's robotaxi reveal.

Jefferies analysts describe Tesla's event as a "best-case outcome for Uber," minimizing competitive threats.

A USD 100 price target from Jefferies indicates a potential 28% upside for Uber.

Uber Technologies Inc (NYSE:UBER, ETR:UT8) shares reached new heights on Friday, driven by the buzz surrounding Tesla's much-anticipated robotaxi event held the previous night. As Tesla unveiled its robotaxi prototypes, including the Cybercab and Robovan, analysts at Jefferies assessed the implications for Uber and found cause for optimism.

The analysts noted that the unveiling did not present any verifiable advancements in Tesla's autonomous technology, which alleviated concerns about immediate threats to Uber's market position. According to Jefferies, this lack of demonstrable progress is pivotal in shaping a more favorable outlook for Uber. “We believe that TSLA potentially underappreciates the obstacles to scaling a robotaxi fleet,” the report stated, highlighting challenges related to technology, asset ownership, and regulatory compliance.

The absence of concrete advancements from Tesla positions Uber to capitalize on growth opportunities within the autonomous vehicle (AV) market. Jefferies emphasized that AV developers may increasingly seek partnerships with established rideshare companies like Uber instead of launching standalone fleets. This perspective suggests that the introduction of lower-priced autonomous options could significantly expand Uber's mobility total addressable market (TAM).

Jefferies outlined four key reasons supporting their bullish outlook on Uber:

Sustained Booking Momentum: Multiple growth drivers are expected to maintain impressive booking performance.
Expansion of TAM: The entry of autonomous vehicles into the market could lead to substantial growth for Uber.
Cost Discipline: Uber's focus on cost management and improving unit economics is driving peer-leading EBITDA growth.
Diverse Business Model: The company's varied offerings provide offsets against potential macroeconomic slowdowns.

This comprehensive strategy indicates that Uber is well-positioned to navigate competitive pressures, particularly from Tesla’s robotaxi initiatives.

Following the positive analysis, shares of Uber surged, reflecting investor confidence. The stock was up 9.6% by Friday afternoon, reaching approximately USD85.40. Jefferies analysts reiterated their Buy rating for Uber, setting a price target of USD100, which signifies a potential upside of 28% from its current trading levels. This projection underscores the analysts’ belief in Uber's strong operational fundamentals and market adaptability.

As the autonomous vehicle landscape continues to evolve, the outlook for Uber appears increasingly robust. The company’s ability to leverage its existing infrastructure and customer base positions it as a formidable player, even in the face of ambitious competitors like Tesla.

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