Uber gets the nod to join the S&P 500. Here's where analysts see the stock going next

Published Mon, Dec 4 202310:11 AM ESTUpdated Mon, Dec 4 20233:57 PM EST

Analysts say Uber Technologies' forthcoming ticket into the S & P 500 is a positive catalyst for the stock moving forward. The dominant ride-hailing company on Friday was named by S & P Dow Jones Indices to join the benchmark index before the opening bell on Dec. 18, replacing Sealed Air Corporation. Uber stock was 5.5% higher in early trading Monday in anticipation of index fund managers adding it to their portfolios. UBER YTD mountain Uber stock. Oppenheimer analysts led by Jason Helfstein raised their price target on Uber to $75 per share, or about 31% higher than Friday's $57.35 close, and reiterated an outperform rating following the announcement. Helfstein said in a report that Uber's entry into the S & P 500 could underpin future stock appreciation by bolstering investor sentiment. "Following the inclusion, we expect UBER to lean into growth and share buybacks, which should increase investor sentiment for growth/return in 2024," Helfstein wrote. "We believe this is a positive for Uber shares given that the S & P 500 is one of the most widely followed benchmarked indices in the equity markets," William Blair analyst Ralph Schackart said in a Sunday note, reiterating an outperform rating. "We believe that Uber will transition from 'nice to own' by investors to an 'allocation consideration' now that it is included in the S & P 500." Redburn Atlantic analyst James Cordwell also maintained a bullish outlook on Uber, restating a buy rating on Monday and raising his target price to $68 per share, or about 19% upside. "The focus now turns to where next, with the problem being that the obvious target — $10bn in FY26 — is already factored into consensus," Cordwell said, referencing an objective for earnings before interest, taxes, depreciation and amortization. "However, we believe the company should switch investor focus to GAAP EPS, where our $3 FY26 forecast still offers material upside and the implied 18.5x P/E remains compelling, in our view." — Additional reporting by CNBC's Michael Bloom.