Uber's deal with Domino's is a strong endorsement, BofA analyst says as he turns more bullish

BofA Securities analyst Justin Post is the latest to weigh in with a more upbeat view of Uber Technologies Inc.'s stock (UBER), lifting his price objective to $51 from $44. Uber recently announced a partnership with Domino's Pizza Inc. (DPZ), and the pizza chain could emerge as one of Uber's highest-margin merchant partners, in Post's view, since Uber won't be actually delivering the orders. Still, the arrangement might have low commission rates at the outset. "Without knowing take rates or margins, we view the Domino's partnership as an endorsement of Uber's platform capabilities, especially internationally, with platform growth opportunities if Uber proves to have better delivery economies of scale for Domino's deliveries," he wrote Wednesday. On the whole, he's also optimistic about Uber's upcoming second-quarter report, which could show strong margin performance on both the mobility and delivery sides of the business, thanks to a better advertising landscape and improvement in driver supply. Uber shares are up 1% in Thursday trading.

-Emily Bary

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07-13-23 1259ET

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