Uber Technologies Inc (NYSE:UBER) and Lyft Inc (NASDAQ:LYFT) should post “solid” quarterly results this week as the travel market rebounds post-COVID, according to analysts at Canaccord Genuity (TSX:CF, LSE:CF).
Uber shares rose 1.3% trading at US$33.51 on Monday morning ahead of the company’s 4Q results which are due to be released before the market opens on Wednesday, February 8.
Canaccord’s analysts expect Uber to report solid 4Q results as mobility continues to benefit from more normalized consumer activity, continued improvements to driver supply, and cross-platform engagement.
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“While investors may have concerns about the durability of Delivery demand given the macro backdrop, strong customer penetration from the UberOne program and new market expansion should partially mitigate the impact, and we expect a return to accelerating Delivery gross booking growth in 2023 as comps ease,” they wrote in a note to clients.
The analysts also noted that freight is expected to see another quarter of robust growth, largely reflecting the Transplace acquisition, and management may provide an update on the emerging advertising business.
“Investors will likely remain focused on how the company is balancing its strategic investments while also making progress towards its 2024 target of $5 billion in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA),” they wrote.
Business travel recovery potential tailwind for Lyft
Lyft is set to report its 4Q earnings after the market close on Thursday, February 9. Shares of the ride-hailing brand were trading down 1.8% at US$17.07 on Monday morning.
Canaccord’s analysts expect Lyft to report solid, although modestly decelerating, year-over-year growth within the context of improving driver liquidity, robust travel activity, and a rebound in rider engagement.
“The company remains impacted by its higher exposure to West Coast markets, which still trail other regions in recovering to pre-COVID levels and may be impacting overall US market share,” they wrote.
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They added that a rebound in business travel could prove to be a tailwind, noting a recent poll from the Global Business Travel Association which found that 78% of travel managers expect the number of business trips taken by employees to be higher or much higher in 2023 compared to 2022.
“As such investors may be interested in recent adoption trends for Lyft Business, in addition to updates on marketplace products like Shared Rides and Priority Pickups, and management will likely provide an update on its ongoing efforts to reduce costs and achieve its 2024 profitability targets,” the analysts concluded.
Contact the author at emily.jarvie@proactiveinvestors.com
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