Lyft (LYFT – Research Report), the Technology sector company, was revisited by a Wall Street analyst yesterday. Analyst Mike McGovern from Bank of America Securities maintained a Sell rating on the stock and has a $10.50 price target.
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Mike McGovern’s rating is based on several considerations surrounding Lyft’s recent strategic moves and market challenges. Despite the acquisition of FreeNow, which is expected to expand Lyft’s presence in Europe and potentially increase its total addressable market, there are concerns that this expansion might not sufficiently address the company’s existing challenges in the U.S. market. The competitive pressure from Uber and the ongoing pricing challenges in key U.S. cities like San Francisco and Los Angeles remain significant hurdles for Lyft.
Moreover, while the acquisition could provide some near-term growth opportunities, the delay in closing the deal until the second half of 2025 means that its benefits won’t be immediate. Additionally, the potential for partnerships with autonomous vehicle companies like Zoox seems unlikely, and Waymo’s streamlined collaboration with Uber further complicates Lyft’s competitive positioning. These factors contribute to a cautious outlook, leading to the Sell rating as the company may struggle to meet its growth targets while managing these challenges.
According to TipRanks, McGovern is a 4-star analyst with an average return of 5.3% and a 51.25% success rate.