Bank of America Securities analyst Justin Post has maintained their bullish stance on UBER stock, giving a Buy rating on August 22.
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Justin Post has given his Buy rating due to a combination of factors related to recent legislative changes in California that are expected to benefit Uber Technologies. The agreement between Uber and the state of California on bills AB 1340 and SB 371 is a significant development. AB 1340 allows drivers to negotiate wages and working conditions while still providing the option to opt out of unionization. More importantly, SB 371 reduces the mandatory insurance coverage for rideshare drivers, which could lead to substantial cost savings for Uber.
These legislative changes are anticipated to lower the cost of rides in California, potentially increasing demand for Uber’s services. The reduced insurance requirements are expected to decrease the cost per ride, which is currently a significant portion of the total ride cost. Additionally, the potential for similar reforms in other states could further enhance Uber’s competitive edge. Despite the potential for increased costs due to unionization, the overall financial impact is expected to be less significant than the savings from reduced insurance costs, supporting the Buy rating.
In another report released on August 22, TD Cowen also maintained a Buy rating on the stock with a $108.00 price target.