KeyBanc Boosts DoorDash and Updates Uber's Price Target
KeyBanc Capital Markets has recently expressed its confidence in the food delivery sector by upgrading DoorDash (NASDAQ: DASH) to an “overweight” rating while also revising Uber's (NYSE: UBER) price target. This upgrade signals the firm's belief in the resilience and growth potential of both companies, especially in the competitive environment of mobility and delivery services.
Consistent Growth for DoorDash
For DoorDash, this upgrade marks a move from a “sector weight” rating to “overweight,” accompanied by a notable increase in the price target to $177. This updated valuation reflects a remarkable 20x multiple on projected EBITDA for 2026, showcasing high growth expectations.
Expanding Market Share
This positive outlook stems largely from DoorDash's rapid expansion within food delivery and recent efforts in grocery delivery. A recent survey revealed that 39% of consumers considered DoorDash their go-to food delivery service, leaving Uber behind at 16%.
Growth in Grocery Delivery
In addition, DoorDash's presence in the grocery sector is becoming increasingly significant. Currently, 8% of respondents identified it as their primary grocery delivery service, marking a solid gain of 300 basis points since the previous year.
Strong Growth Projections
The upgraded sentiment is further supported by optimistic gross order volume (GOV) forecasts. Analysts are projecting an impressive 17% year-over-year growth in GOV for 2025, followed by a steady 15% anticipated growth in 2026.
Positive EBITDA Expectations
EBITDA growth for DoorDash looks promising as well, with projections estimating the company will reach $2.6 billion in 2025 and $3.5 billion in 2026—these numbers are about 6% above consensus estimates. This upward trend reflects DoorDash's ability to improve operational leverage and scale effectively.
Diversification Strategy
Additionally, DoorDash's expansion into advertising and other innovative revenue streams is crucial for strengthening its position in the delivery market, allowing it to maintain a strong leadership role.
Favorable Outlook for Uber
Meanwhile, KeyBanc has raised Uber’s price target to $90 from $80, indicating confidence in ongoing profit enhancements. Although there have been no significant changes to Uber's gross bookings or revenue projections, this adjustment reflects optimism regarding the company’s operational efficiencies.
Expense Management and Growth
Uber’s focus on strict expense control is expected to lead to faster EBITDA growth. KeyBanc has also adjusted its EBITDA estimates for 2024–2026 upward by approximately 1% to 2%. By 2026, predicted EBITDA for Uber is anticipated to reach an impressive $11.3 billion, underscoring its operational efficiency, particularly in the mobility area.
Financial Outlook
The company’s steady approach to managing operating costs, coupled with potential positive effects from currency exchange fluctuations, enhances its financial outlook and overall growth prospects.
Frequently Asked Questions
What does KeyBanc's upgrade mean for DoorDash?
The upgrade to “overweight” indicates greater confidence in DoorDash's growth prospects and market position, reflecting strong earnings expectations for the future.
How well is DoorDash doing in grocery delivery?
DoorDash is performing well in the grocery delivery sector, currently holding an 8% market share as a leading service provider, demonstrating growth in this new area.
What are the EBITDA growth forecasts for DoorDash?
DoorDash is projected to reach EBITDA figures of $2.6 billion in 2025 and $3.5 billion in 2026, surpassing consensus expectations.
How has KeyBanc adjusted its view on Uber?
KeyBanc raised Uber's price target to $90, reflecting positive expectations for consistent profit growth driven by improved operational efficiencies.
What are the projections for Uber's EBITDA in the coming years?
Uber's EBITDA is expected to hit $11.3 billion by 2026, bolstered by a disciplined approach to expense management and operational excellence.
