Goldman Sachs is bullish on Lyft following its latest earnings report. Analyst Eric Sheridan upgraded the ride-hailing stock to buy from neutral. Sheridan’s 12-month price target of $20, up from $19, implies that shares could rally 54% from Thursday’s close. Lyft posted adjusted EBITDA of $106.5 million for the first quarter, beating FactSet’s estimate of $92.4 million. The company’s gross bookings growth accelerated to 15% year over year, supported by “a rapid cadence of product innovation in consumer offerings and rising driver supply affinity enhancing the forward growth trajectory,” Sheridan wrote. Lyft guided for ride bookings to rise again in the mid-teens in the second quarter. The company also increased its share repurchase to $750 million from $500 million. Shares rallied more than 12% in the premarket following the report. LYFT YTD mountain LYFT YTD chart “While short-term debates will likely stay rooted in industry trends around rideshare pricing, market share fluctuations, positioning against the [autonomous vehicles] theme and/or any changes in consumer discretionary behavior, we believe that shares are dislocated from LYFT’s earnings power in the next 2-3 years and upgrade the stock to Buy,” the analyst wrote. “We …expect that AV operators and fleet owners will continue to enter into partnerships in the coming years and that LYFT has an important role to play in the broader hybrid/AV ecosystem (incl. for demand generation and fleet management),” Sheridan said. “We believe that the North America ridesharing duopoly industry structure is supportive of rational competitive behavior in the years ahead (all while we expect the category to grow double-digits).” Despite Sheridan’s upgrade, most analysts are neutral on the stock. LSEG data shows that 33 of 47 who cover Lyft rate it a hold, while just 13 assigned a buy or strong buy rating. One analyst rates the stock as underperform.
