Lyft Stock Drops as Ubs Lowers Its Ratings and Slashes Its Forecast

Lyft stock slightly slid to $13.72 at 10:07 AM EDT on Monday.

On Monday, Lyft (NASDAQ:LYFT) shares dropped close to 4% after investment firm UBS cut its expectations and downgraded the ride-hailing startup, citing that both customers and drivers prefer Uber (NYSE:UBER).

Analyst Lloyd Walmsley reduced Lyft’s (LYFT) stock’s recommendation from buy to neutral and lowered his price target from $50 to $16. Additionally, he reduced his projected adjusted EBITDA objective for 2024 from $868 million to $671 million, considerably below the $1 billion target set by the firm and Wall Street.

The analyst expressed concerns about the company’s potential reinvestment in its business, sales statistics that are expected to fall short of expectations, and growing insurance expenses. Walmsley added that the estimated fourth-quarter revenue of $1.168 billion is too high.


According to a UBS Evidence Lab driver survey (Access dataset) and app data, drivers prefer Uber, Lyft is not their primary app, and Uber has more app downloads and usage among drivers and consumers than Lyft. In premarket trade, shares of Uber (UBER) decreased slightly.

Lyft stock outlook

A hazy acquisition rumor regarding Lyft (NASDAQ:LYFT) surfaced earlier this month, but experts promptly dismissed the idea. On September 8, amid some hazy takeover rumors that were spread on social media, Lyft stock (LYFT) increased by 17%. Traders’ publication of a report at the time that suggested that Lyft would be a possible activist target because of its valuation seemed to have given the ridesharing company a lift.

Although Lyft’s second-quarter earnings were better than anticipated, investors are still worried that rising interest rates may cause the economy to slow down, which might be bad for Lyft’s business.

Investors are processing a lot of information, which is causing the stock price volatility of Lyft, especially when you factor in recent acquisition speculation.

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