Uber Technologies Inc (NYSE:UBER, XETRA:UT8) saw its price target lowered to $101 from $103 by Bank of America, which maintained a ‘Buy’ rating following the company’s second quarter results, with the analysts citing a lower valuation multiple despite raising their earnings estimates.
Shares traded at about $71 on Thursday afternoon, up about 4%.
Bank of America wrote that Uber’s gross bookings and EBITDA of $58 billion and $2.82 billion, respectively, exceeded Street estimates of $57.2 billion and $2.79 billion, with the upside driven by accelerating ex-foreign exchange growth in Delivery.
Bookings growth decelerated by one percentage point to 24%, based on 18% growth in trips, while EBITDA margins relative to gross bookings increased by 0.6 percentage points year over year despite higher operating expenses. Uber also plans to slow the pace of headcount growth, according to the note.
For the third quarter, Uber guided to gross bookings of $58.25 billion to $60.25 billion and EBITDA of $2.86 billion to $2.96 billion. Bank of America wrote that its estimates were at the high end of the guidance ranges and that it expected third-quarter results to come in above prior Street estimates.
The analysts remained cautious on Uber’s autonomous vehicle outlook, saying there was little new information on competition from Waymo or Lucid’s ability to deliver autonomous vehicles to Uber. Uber reaffirmed its goal of operating autonomous vehicles in 15 cities by year-end and highlighted its confidence in Lucid’s cost actions and delivery timeline.
Bank of America wrote that the autonomous vehicle evolution would take years rather than quarters, while pointing to Uber’s expanding mobility network. The firm highlighted 16% monthly user growth, expected Mobility growth of 22% this year and faster growth in Uber One subscribers.
“We agree with Uber's vision for multiple AV providers and, although Uber could lose some share over time, we think the stock price significantly undervalues the long-term opportunity,” the analysts wrote.
Bank of America raised its third-quarter 2026 gross bookings estimate by 1% to $60 billion and its EBITDA estimate by 2% to $3 billion, representing $0.87 in GAAP EPS. For 2026, the firm raised its gross bookings estimate by 1% to $237 billion and EBITDA by 2% to $11.5 billion.
The analysts expect Uber to generate $11 billion in free cash flow in 2026 and $12.5 billion in 2027, which they said would provide capacity for acquisitions, autonomous vehicle investments and share buybacks.
Bank of America wrote that scheduled autonomous vehicle launches in the second half of the year, new AV city announcements and potential new original equipment manufacturer deals leveraging technology from Uber’s Nvidia partnership could support multiple expansion. The firm said Uber’s stock is trading near a historical low valuation of 12 times 2027 estimated EBITDA.