Uber stock falls as Delivery Hero bid faces skepticism
Uber Technologies Inc. shares declined more than 2% on Friday, underperforming the market, as investors reacted to a reported rejected bid for Delivery Hero and concerns about autonomous vehicle spending. BNP Paribas analyst Nick Jones noted that while a deal makes strategic sense in regions like Latin America and the Middle East, the reported offer of 33 euros per share was rejected, and any acquisition would pressure near-term growth and margins. The firm maintained a positive rating with a $108 price target, while the broader analyst consensus remains bullish with an average target of $105.95. Technically, the stock is trading below all major moving averages and near its 52-week low of $67.19.
*this image is generated using AI for illustrative purposes only.
Uber Technologies Inc. (NYSE: UBER) stock fell more than 2% on Friday, underperforming a broader market rally, as investors focused on a reported bid for Delivery Hero and concerns over autonomous vehicle spending. The Nasdaq gained 0.27%, and the S&P 500 added 0.39%. The decline comes amid reports that Uber is considering the sale of specific assets owned by Delivery Hero to facilitate a full takeover, a strategy aimed at navigating potential regulatory hurdles and antitrust concerns.
BNP Paribas said Friday that a potential acquisition of Delivery Hero would make strategic sense for Uber, particularly in Latin America, the Middle East, and parts of Asia. Analyst Nick Jones noted that Uber's reported offer of 33 euros per share, or about $38, was rejected, with investors reportedly seeking at least 40 euros per share, or about $46. While Jones sees a clear strategic rationale for consolidation, he cautioned that any deal would likely weigh on Uber's growth rate and profit margins in the near term, though cost synergies could eventually offset those pressures.
The firm maintained a positive rating on Uber and reiterated a $108 price forecast, implying roughly 55% upside from the stock's June 11 closing price. Analysts remain broadly bullish, with a Buy consensus rating and an average price forecast of $105.95. Recent analyst actions include Tigress Financial raising its price forecast to $115 on June 12, BTIG maintaining a Buy rating and $100 price forecast on May 28, and DA Davidson maintaining a Buy rating and $107 price forecast on May 26.
| Key Aspect | Detail |
|---|---|
| Acquirer | Uber |
| Target | Delivery Hero |
| Reported Offer | 33 euros per share (~$38) |
| Investor Ask | 40 euros per share (~$46) |
| Strategy | Asset sales to smooth takeover |
| Objective | Regulatory approval |
Technically, Uber continues to trade below all major moving averages, reinforcing a bearish trend. The shares are 5.6% below their 20-day simple moving average, 7.6% below the 50-day average, 8.6% below the 100-day average, and 17.8% below the 200-day average. A "death cross" that formed in January remains a negative signal, and momentum indicators like the MACD remain weak. A key resistance level sits near $78.50.
Uber Technologies shares were down 2.19% at $68.03 at the time of publication on Friday, trading near its 52-week low of $67.19. The funds most invested in Uber include the Tremblant Global ETF (TOGA) with a 4.84% weight, the Trenchless Fund ETF (RVER) with a 4.86% weight, and the Pacer US Cash Cows Growth ETF (BUL) with a 4.70% weight.
How will Uber's strategy of selling specific assets to satisfy regulators impact the overall value proposition of acquiring Delivery Hero?
What specific cost synergies does Uber anticipate to offset the projected pressure on near-term profit margins and growth rates?
If a revised bid closer to 40 euros per share is required, how might this increased acquisition cost affect Uber's capital allocation plans for autonomous vehicle development?
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