According to Piper Sandler, Uber’s outlook has improved and that should lead to better stock performance in 2023. Analyst Alexander Potter has upgraded the stock from neutral to overweight, saying Rising inflation will push consumers to switch to ride-hailing rather than buying expensive cars. “Car prices are near all-time highs and a quick return to historic prices seems unlikely. We therefore expect cash-strapped consumers to increasingly opt for the go. car instead of trying to replace old cars,” Potter wrote in a Sunday article. Note. Shares of Uber fell 41% in 2022, down for the second year in a row as rising interest rates dampened the growth prospects of many tech companies. Now, however, ride-hailing services are looking like a favorable alternative for consumers challenged by rising prices and growing recession fears – a trend that is also growing. would benefit the stock of Lyft, Uber’s competitor, which has an overrated rating from the company. “Expensive cars can force consumers to consider alternative forms of transportation. In November, the average price of a new car was ~$49,000 in the United States. And while the price of an umbrella, the average price of a new car was ~$49,000. used cars have ‘jumped’, the REAL price of buying a used car auto is still going up (at least if financed with a loan),” the note reads. For the analyst, Uber is “the #1 way to invest in this topic.” Although Uber faces some risks, “the company’s superior size has allowed Uber to leverage operating costs more effectively than its peers.” Some of the challenges for Uber include generating about 36% of its revenue from deliveries, which faces more recession pressure in 2023. Analyst $33 price target, up from $31, representing a 25% gain on shares of Uber. Shares rose more than 2% in premarket trading on Monday. Separately, Potter downgraded DoorDash’s stock to a lower level from neutral. Delivery shares fell 3.8% in premarket trading on Monday. —Michael Bloom of CNBC contributed to this report.