Can Uber shares really become Deutsche Bank’s top pick for 2021?
The Uber share price began to rise on January 4, thanks to a favourable forecast from Deutsche Bank. The company is placing focus onto its rideshare technology, which could give Uber shares a ‘meaningful upside’ in 2021.
- Deutsche Bank picks Uber as a top investment pick for 2021.
- Upgraded forecast fuels 3.4% daily surge for the Uber share price.
- Rideshare software could make Uber a global leader in travel.
- Want to trade Uber shares? Open an account today.
The expectation in the short-term is that continued COVID-19 restrictions could give investors a less than smooth ride. However, the investment bank sees a positive H2 on the horizon as vaccinations pave the way for a return to ridesharing. The Uber share price has rallied off the back of this assessment. After opening at $52.22 on January 4, shares took a sharp drop before climbing to $54.01 on January 5. That’s only marginally off the company’s highest ever share price of $54.86.
Uber shares spike after CEO looks to Amazon for inspiration
Fuelling the positive sentiment from Deutsche Bank is Uber’s commitment to becoming the ‘Amazon of transportation’. The comment from CEO Dara Khosrowshahi signals a change in direction for the company. After abandoning its self-driving vehicle hire project in late 2020, Uber sold its fledgling flying taxi service, Elevate, to Joby Aviation in December. The move away from creating hardware coincides with putting more resources into software development.
Khosrowshahi’s aim to become the global leader in mobility and delivery has prompted analysts to reconfigure their expectations. Deutsche Bank has subsequently upped its Uber share price target from $54 to $80, citing rideshare and improved profitability from deliveries as the primary reasons.
Post-COVID position could strengthen Uber
In essence, Uber is aiming to provide software that will underscore the post-COVID era in travel and delivery. As vaccine rollouts breakout around the world, hopes that life will return to normal in the second half of 2021 are growing. However, with every major economy suffering sharp declines over the last 12 months, businesses will have to adapt. This will be par for the course at Uber HQ.
The company was forged in the fires of the global financial crisis. Since 2009, it’s changed the way many people use taxis and, more recently, how food deliveries happen. In the wake of COVID-19, when the average consumer has less to spend, Uber has the experience and technology to make certain services cheaper. It’s already doing this in London. By tapping into open data sources, Uber Ferries is offering a more efficient water-bound taxi service.
Is a strong second half incoming?
It’s this ability to tweak, rather than completely disrupt industries, that’s prompted analysts to reconsider their positions on Uber shares. A major uncertainty in the current equation is vaccinations. However, as more people are given protection against COVID-19, Deutsche Bank sees a positive upside in H2.
Are you ready to get involved in the markets?
Take your position on US shares for just a small initial deposit with CFDs.
Whether you trade or invest, you’ll get access to pre-market and after-hours trading on 70 US stocks.
Open an account to get started.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
Please see important Research Disclaimer.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.