Uber Technologies (UBER) shares ended higher on Thursday even though a senior Arete Research analyst downgraded the ride-hailing and delivery giant to “Neutral.” In his research note, Oliver Lester also reduced his price objective to $74, indicating a lack of meaningful upside in UBER from current levels.
Note that Uber stock has been a disappointment for investors in 2026, currently down about 20% versus its year-to-date high.
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www.barchart.comWhat Made Arete Downgrade Uber Stock?
Lester downgraded UBER shares primarily because of an expected deceleration in profitability.
The company’s earnings per share (EPS) are expected to tumble by an alarming 65% in the current quarter to $1.09, even as full-year consolidated sales are set to expand by 9.6% to $14.76 billion. This growing divergence between top-line growth and margin expansion reflects rising operational costs, heavier driver incentives, and ongoing regional reinvestments.
Arete’s analyst cautions that market consensus estimates have remained overly optimistic, creating heightened downside risk if future quarterly earnings fail to reaccelerate margins rapidly.
Note that UBER does not currently pay a dividend to offset these concerns.
Robotaxi Competition to Hurt UBER Shares
Beyond financials, Arete pointed to intensifying competition in the autonomous mobility sector – particularly from Tesla’s upcoming Cybercab network.
Tesla’s proposed autonomous ride-hailing architecture promises significantly lower cost-per-mile rates for consumers, which could disrupt Uber’s pricing power and core take-rates.
While UBER has made tangible progress in self-driving partnerships, including securing Spain’s first commercial permit for Level 4 autonomous vehicles, Lester expects variable pricing pressure and capital-intensive autonomous integrations to weigh on its enterprise valuation multiple in the near term.
Note that Uber shares currently sit below their major moving averages (MAs), with an RSI in the early 40s indicating intense selling pressure.
Wall Street Remains Bullish on Uber
Other Wall Street analysts do not agree with Oliver Lester’s dovish view on UBER stock, though.
According to Barchart, the consensus rating on the ride-hailing and delivery firm remains at Strong Buy, with the mean price target of over $103 indicating potential upside of about 40% from current levels.
www.barchart.com On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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