Citigroup Upgrade Drives Uber Stock Higher

UBER also seems to be sporting affordable near-term options

by Emma Duncan

Published on Oct 7, 2019 at 10:06 AM

Ride-hailing service Uber Technologies Inc (NYSE:UBER) is up 1.5% this morning at $30.11, after receiving an upgrade to "buy" from "neutral" at Citigroup. The brokerage firm waxed optimistic on third-quarter results and growth for the second half of 2019, despite legal troubles the company has endured.

Though it's still early, today's gains puts Uber Technologies stock on pace toward its first weekly win since mid-September. The shares are still more than 30% below their late-May initial public offering (IPO) of $45, and have struggled since trading near that level in late July. In fact, in early August the stock began seeing resistance at the newly formed 30-day moving average, and touched a record low of $28.32 last week.

In terms of analysts' outlook, the consensus has remained optimistic, as 21 of 29 following firms issued a "buy" or "strong buy" recommendation coming into today. The equity's average 12-month price target of $49.59 echoes this sentiment, as it comes in 65% above current trading levels.

Regardless of price action, those looking to speculate on UBER's short-term trajectory should consider doing so with options. The equity's Schaeffer's Volatility Index (SVI) of 46% is higher than just 26% of all other readings from the past year, suggesting near-term option contracts are attractively priced at the moment, from a historical volatility standpoint.

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