BofA Securities analyst Justin Post has expressed a more positive outlook on Uber Technologies Inc.’s stock (UBER), increasing his price objective from $44 to $51. The recent partnership between Uber and Domino’s Pizza Inc. (DPZ) has caught Post’s attention, as he believes Domino’s could become one of Uber’s most profitable merchant partners. Interestingly, Uber will not actually be responsible for delivering the orders. However, the initial commission rates for this arrangement might be low.
Post sees the Domino’s partnership as a validation of Uber’s platform capabilities, particularly on an international scale. Uber’s ability to achieve delivery economies of scale for Domino’s could potentially lead to further growth opportunities. Though details regarding take rates and margins are currently unknown, Post remains optimistic about Uber’s second-quarter report. He anticipates strong margin performance in both the mobility and delivery sectors of the business, citing improvements in the advertising landscape and driver supply.
As of Thursday trading, Uber shares have risen by 1%.
Key Takeaways
- BofA Securities analyst Justin Post raises price objective for Uber.
- Domino’s Pizza partnership could be highly profitable for Uber.
- Collaboration showcases Uber’s platform capabilities.
- Optimistic outlook for Uber’s upcoming second-quarter report.
- Uber shares see a 1% increase in Thursday trading.
