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The Uber share price could double, Barclays Capital says

Analysts at Barclays Capital think the Uber share price could double over the next year as the ride-hailing company looks to become profitable.

Uber could see its share price double over the next year, according to analysts at Barclays Capital.

The bank, which issued a $40 target price for the stock, told investors that it believes the stock could trade as high as $54 as the company attempts to become profitable.

‘We see the overhang around the lock-up expiration diminishing going forward, and 4Q19 results are likely to be more impressive than 3Q on the bottom line,’ Barclays Capital analysts said in a note to investors last week.

‘This cocktail should produce outsized returns for those willing to take the extreme risk,’ the analysts added.

Based on Uber closing at $26.75 on Monday, analysts at Barclays Capital believe that the ride-hailing company has a potential upside of between 49.5% to 101%.

You can go long or short Uber with IG using derivatives like CFDs and spread bets.

Uber shares fall well below IPO price

Investors in Uber will welcome Barclays optimism considering that the stock has fallen well below its IPO price of $41.57, with it currently trading 35% below that level.

Analysts and investors are hoping that the company’s other business lines like Uber Eats and its freight delivery platform will help drive sales growth next year and assist it in reaching profitability.

The company has a long way to go though, with Uber recording a $1 billion loss in its third quarter.

Looking to trade Uber and other tech stocks? Open a live or demo account with IG.

Barclays Capital says restructuring needed for Uber to reach profitability

Analysts at Barclays Capital laid out a blueprint for Uber to follow in order to help it reach profitability.

The bank argued that the company should combine its Uber Eats business with another company and significantly rollback its operations in India, a move that would ‘meaningfully change the profitability outlook and the stock narrative’.

‘Food delivery and ride-hailing in duopoly market structures can be very profitable, like travel, and we think Uber is one catalyst away from the market realising it,’ the analysts added.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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