Meanwhile Uber will also start trialing a couple of new initiatives in the next few days, to help offset the loss in demand for its core ride-sharing business.
First, Uber Direct will carry out on-demand deliveries for shops and customers, with over-the-counter medicine provider Cabinet, the Portuguese national post service and pet food company Pet Barn already signed up for the service. According to Uber all deliveries will be contact-free to mitigate the coronavirus risk.
Its second initiative, Uber Connect, is a courier service for customers to send same-day deliveries to each other and will be trialed in 25 cities throughout the US, Australia, and Mexico.
Despite the company’s short-term challenges, analysts are staying firmly onside when it comes to UBER stock. TipRanks shows that Uber boasts a bullish Strong Buy analyst consensus, with a $43 average analyst price target (51% upside potential). (See Uber stock analysis on TipRanks).
“Fully cognizant of the near-term pressures on Rides — with the company likely facing 50%+ Y/Y Bookings declines in lock- down markets for an unknown period of time — we reiterate Outperform” comments RBC Capital analyst Mark Mahaney.
As a transportation utility, he believes UBER’s fundamentals can quickly recover post lock-down. “Uber should eventually emerge a stronger asset – with a more constructive supply environment, a more rational competitive environment, material new growth opportunities, and a potentially structurally improved Eats segment” Mahaney concluded.
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