I'm Driving Closer to Uber on a Dreary Trading Day
Here's why I might add to this stock before the month ends.
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All the indexes have small gains on Wednesday morning, but breadth is just slightly positive with around 4,800 gainers to 4,100 decliners. The S&P 500 is on the brink of a new all-time high, and the technical action is obviously good, but speculative action is very quiet.
Only about a dozen stocks are up 10%, and there is only one stock, Super Micro Computer SMCI, in the Nasdaq 100 that is up more than 5%. On the S&P 500, the only stocks that are up by more than 5% are Super Micro and Norwegian Cruise Line NCLH.
It is dreary for aggressive traders and illustrates that good trading action doesn’t necessarily correlate with the action in the indexes. The indexes are bullish, but the action isn’t.
There are times when there is great trading in individual stocks when the indexes are flat. Sometimes, when there is an appetite for speculation, traders gravitate toward certain smaller stocks and help to create some big moves. That is not happening in this environment.
While aggressive traders are stifling their yawns, there are some dip buyers who buy minor weakness and keep the indices in good shape, but this isn’t the sort of trading that occurs when there are higher levels of volatility.
One stock I’ve been holding for a while and want to add before its earnings on the morning of Oct. 31 is Uber Technologies UBER. Uber has been bouncing around recently on talks about Tesla’s TSLA robotaxi, which will be presented on Thursday. Uber already has a robotaxi program in conjunction with GM GM, and analysts are quite bullish on the stock. I would view any selloff on the Tesla presentation as an opportunity to add UBER.
Uber has 30-buy ratings and one hold rating. The average target price is $89.31, with a high of $100 and a low of $77, which just happens to be the current price.
On Tuesday, Truist raised its price target on Uber to $99. It expects gross bookings to be in line with consensus expectations and delivery bookings to be slightly ahead of expectations. “Demand remains healthy for Uber, driven by a resilient consumer, sticky products, and ongoing improvements to the platform.”
Uber is expected to have over 100% earnings per share growth in 2025 to $2.38 and currently has a trailing price-to-earnings of 84, which is an attractive valuation, especially when compared to big-cap technology names.
At the time of publication, DePorre was long UBER.
