Uber will soar 22% next year before returning to pre-COVID ridership by early 2022, Wedbush says

AP/Diane Bondareff

• Uber will leap 22% next year, as economies reopen, before returning to pre-COVID ridership by early 2022, Wedbush analysts said in a Wednesday note.
• Wedbush boosted their price target for Uber to $60 from $49, implying a 22% rally from current levels.
• The ride-hailing firm will be "standout name" next year as mass distribution of a COVID-19 vaccine by mid-year would mean consumer demand would snap back.
• The "shining" Uber Eats segment and acquisition of food-delivery startup Postmates would also add significantly to the company's overall stock, Wedbush said.
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Uber will soar 22% next year, as more people start working and spending their free time outside the house, before its ride-hailing services return to pre-COVID levels by early 2022, Wedbush analysts said in a note Wednesday.

Analysts Dan Ives, Ygal Arounian, and Strecker Backe raised Uber's 12-month price target to $60 from $49, implying a 22% rally from the company's closing price of $49.11 on Wednesday. Uber's stock is up 81% year-to-date.

Uber will be a standout name in the economic recovery trade as consumer demand could "show a significant snap back during the course of 2021 with the company potentially getting back to pre-COVID ridership by early 2022," the analysts wrote.

Wedbush also projected more companies encouraging and subsidizing their employees to ride-share instead of using public transportation for their commutes — a trend it said is expected to gather pace next year.

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Significant progress via the "shining star" Uber Eats segment and the acquisition of food-delivery startup Postmates is together roughly worth $15 a share to the company's stock, they said. 

Wedbush maintained an "outperform" rating on the company's shares. 

"Delivery can also continue to offset pressure from mobility in the near-term as the pandemic environment gets worse before it gets better," the note said. "Looking ahead we believe the underlying demand curve and adoption for food delivery has permanently changed domestically and throughout the globe with the growth prospects for this business accelerated by roughly 1-2 years."

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