Continued rollout of COVID-19 vaccines bodes well for ridesharing app Lyft (NASDAQ: LYFT), especially as summer approaches, as it means more people will be traveling again.
Analyst is so bullish on Lyft’s outlook that he put its stock on his “best ideas” list and raised its price target to $ 85 per share, suggesting there is 33% more upside from Lyft’s stock close on Tuesday.
The latest data from the U.S. Centers for Disease Control and Prevention shows that more than 109 million doses of the vaccine have been administered since the first vaccine was introduced in December, representing more than 21% of the U.S. population. Some 2.4 million shots per day are administered.
Wedbush analyst Daniel Ives told investors in a research note that continued progress in the fight against COVID-19 will enable Lyft and its rival Uber Technologies the opportunity to see a “springboard in consumer demand rebound”.
Ives believes Lyft isn’t the same company today as it was a year ago, as the pandemic forced the rideshare service to cut spending after people were forced to stay indoors. As he explains, “the profitability profile and leverage essentially turned Lyft into a different business than it was before the pandemic.”
As a result, consumer trip will lead to a rebound occurring in the second half of 2021 as the effects of the reopening will be stronger than expected. This will result in a Lyft that is more profitable and more likely to generate more revenue per passenger.
Ives previously had a price target of $ 72 on Lyft, 12.5% higher than his closing price yesterday, but with those favorable winds he raised his target to $ 85 and placed the stock on the. list of his company’s “best ideas”.
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