Uber IPO means investors should buy ridesharing Lyft stock

Close-up of vertical sign with logos for ride-hailing companies Uber and Lyft.

Smith Collection | Gado | Getty Images

Susquehanna bumped its rating of Lyft’s stock to positive from neutral on Tuesday, as the firm says Lyft is “a pure-play on US ridesharing” that should benefit from less buzz around Uber.

“With the US rideshare market becoming more rational, LYFT showing clear evidence of marketing and insurance cost leverage, and UBER’s IPO out of the way, this is the time to buy the stock,” Susquehanna analyst Shyam Patil said in a note to investors.

Broadly speaking, Patil said his firm likes the opportunity in the ridesharing market, as well as Lyft’s “more longer-term transportation-as-a-service vision.” Susquehanna believes Lyft has “a strong #2 market presence,” with about 40% of the U.S. ridesharing market. Additionally, in comparison to Uber, the firm said Lyft has a cleaner models that gives investors more options, “especially as the autonomous wave hits the market.”

Lyft shares rose 3.9% in premarket trading from Monday’s close of $56.76 a share. The stock has rallied a bit since hitting a low of $48.15 a share last month but remains well below its March IPO price of $87.24 a share.

Susquehanna also raised its price target on Lyft to $80 a share from $57 a share.

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