UBER) shares are down 5.4% in the last three months, and one of the biggest factors weighing on the stock is California’s AB5 law, which could potentially completely overhaul the company’s business model by forcing Uber to classify its drivers as employees rather than independent contractors.
Fortunately for Uber investors, one Wall Street analyst said Wednesday that new poll data suggests Uber may dodge the AB5 bullet on Election Day.
LYFT), DoorDash and Instacart.
A new poll published by Redfield and Wilton found 41% of California voters would vote “yes” for Prop 22 compared to 26% who would vote “no” and 34% who are undecided.
On Wednesday, Post said additional polling suggesting a “yes” vote is likely could be a major catalyst for Uber stock.
“The Prop 22 polling could be most important stock driver over the next two months, and more data showing an advantage for ‘Yes’ could shift UBER stock sentiment positively, to more of a recovery stock, in our view,” the analyst said.
In addition to Prop 22 polling, Post said the financial update that Uber CFO Nelson Chai presented at a virtual investor conference on Tuesday suggests that Uber’s outlook is improving.
Chai said Uber’s August gross bookings were down less than 10% from a year ago, including a 50% drop in Mobility bookings and a 130% gain in Delivery.
While underlying business metrics continue to improve, Post said he expects Prop 22 will ultimately pass in California in November.
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Latest Ratings for UBER
| Date | Firm | Action | From | To |
|---|---|---|---|---|
| Aug 2020 | Citigroup | Maintains | Buy | |
| Aug 2020 | Daiwa Capital | Upgrades | Neutral | Outperform |
| Aug 2020 | RBC Capital | Maintains | Outperform |
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