Lyft Shares Rally After JPMorgan Forecasts 50% Upside

(Bloomberg) -- Lyft Inc. shares rallied on Friday, after JPMorgan recommended buying the stock and wrote that it had “50%+ upside potential.”

Shares jumped as much as 6.6% in midday trading. While the stock has gained more than 20% off a low from earlier this month, it remains more than 25% below a record high hit in March.

JPMorgan analyst Doug Anmuth has an overweight rating and $86 price target on the ride-sharing operator; that target represents upside of nearly 57% from Lyft’s Thursday close.

The bullish view comes after JPMorgan met with Lyft’s management team, which was “very confident” about an easing competitive environment for ride sharing in the U.S., as well as on “high-growth, high-margin revenue opportunities in Lyft Business,” he wrote.

The comments also come a day after Uber Technologies Inc. -- Lyft’s primary rival in the sector -- reported first-quarter results that were seen as strong and laid out a path to lower costs.

“With a bit more distance from their IPOs and now having both reported 1Q earnings, we view the congruous commentary from Lyft and Uber as favorable for the industry, and a positive catalyst for Lyft shares,” Anmuth wrote. “The competitive environment is likely as favorable as it’s ever been in the ~7 years of ridesharing, with record low incentives for drivers and riders.”

To contact the reporter on this story: Ryan Vlastelica in New York at rvlastelica1@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Steven Fromm

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