Nomura downgraded both Lyft and Uber, but both stocks have been excellent in 2023
Ridesharing bigwigs Uber Technologies Inc (NYSE:UBER) and Lyft Inc (NASDAQ:LYFT) are moving in opposite directions this morning, after Wall Street brokerage firm Nomura weighed in on the stocks.
For LYFT, Nomura downgraded the stock to "reduce" from "neutral." They did hike its price target to $13 from $11.70, that still represents a discount to Lyft's current perch, last seen down 2.9% to trade at $15.10. The analyst cited shrinking market share and low profitability compared to peers that could hinder the company's growth.
Uber stock was last seen trading 0.5% lower at $62.80, after Nomura's downgrade to "neutral" from "buy," that was also accompanied by a price-target hike to $62 from $59. The brokerage noted, "Most of the milestones and catalysts that we were anticipating to boost Uber's stock value have been largely bet," and noted growth stocks like UBER largely benefit from falling interest rates.
Compared to the SPDR S&P 500 ETF Trust (SPY) that is up 24.6% in 2023, both LYFT and UBER are outperformers, with the former up 36.2% and the latter boasting a 152.9% lead within the same timeframe. For both stocks, this marks their first annual wins since 2020 and their biggest annual gain since going public that same year.