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Key Takeaways
- Analysts from Oppenheimer started covering Lyft on Wednesday, issuing the ridesharing company's stock an "outperform" rating.
- Analysts expect the ridesharing industry will continue to grow as younger consumers face rising car ownership costs.
- Lyft has also announced the acquisition of a European Ridesharing Company for just over $200 million on Wednesday.
Analysts at Oppenheimer on Wednesday began coverage of Lyft with an “outperform rating” and wrote that they expect the company will benefit as ridesharing continues to “challenge the rising costs of car ownership.”
The analysts gave Lyft a $15 price target, a premium of about 38% to the stock's closing price Tuesday. Of the 15 analysts who currently cover Lyft tracked by Visible Alpha, four—including Oppenheimer—have "buy" or equivalent ratings, 10 have "hold" ratings, and one has a "sell" rating, with a price target range of $12 to $24.
Oppenheimer wrote, Lyft will benefit as younger users of its app age and continue to rely on it as car ownership costs increase. They also said that Lyft (UBER) and its rival Uber should see lower costs, as autonomous driving technology continues to improve and the companies partner up with self-driving car makers to offer rides via their apps.
On Wednesday, Lyft also announced that it had acquired FREENOW, an international ridesharing service, for 175 million euros ($199.1 millions) from the BMW Group and Mercedes-Benz Mobility. Lyft stated that the deal would close in the latter half of the year.
Recent trading shows that shares of Lyft, the company set to announce its latest quarterly earnings after the bell on 8 May, are up by around 2.2%. In the last 12 months, they have fallen by about 40%.
