Lyft (Nasdaq: LYFT) Rally Live: Wall Street Is Turning Bullish Because of This
Key Points
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Lyft stock is soaring by over 20% today.
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Wall Street has a “hold” rating on the stock. Will today’s rally change their view?
Live Updates
LYFT Share Buyback Details
Lyft management made the following statement on the share buyback program: “Our board of directors has authorized an increase to our share repurchase program to a new total of $750 million. We intend to utilize $500 million of this authorization within the next 12 months, $200 million of which will be used within the next three months. We intend to enter into one or more Rule 10b5-1 trading plans to facilitate the repurchase of shares under the authorization.” The stock remains higher by 24% today.
Resilient Consumer
Lyft (Nasdaq: LYFT | LYFT Price Prediction) has increased its lead to 24.1% on the day to over $16 per share. Despite an economic slowdown that has corporate America worried, Lyft CEO David Risher isn’t losing any sleep. He said on CNBC there are no signs of a weakening consumer, telling the business network, “Our team is stronger than it’s ever been, and the consumer demand is absolutely there.” Lyft has been growing its gross bookings for 16 consecutive quarters.
Wall Street Turns Bullish on LYFT
In response to Lyft’s (Nasdaq: LYFT) Q1 results, Wall Street analysts are starting to reconsider the stock.
Goldman Sachs has reportedly upgraded LYFT shares to a “buy” rating from “neutral,” attaching a $20 price target, reflecting 25% upside potential.
Check back for frequent updates on this story.
Lyft stock (Nasdaq: LYFT) stock has captured the spotlight today, soaring by 20.9% on a day when the stock are otherwise undecided. Lyft has risen comfortably above the $15 per share level for a market capitalization of $6.4 billion. The stock is a stone’s throw away from its 52-week high of $19 per share and is trading on volume of 45.1 million shares, more than double its average daily volume.
Lyft stock is rallying after reporting its Q1 earnings, the highlights of which included a surprise profit, improved Q2 outlook and share repurchase program through which it will return value to shareholders. Most of Wall Street has kept a “hold” rating on Lyft shares, but today’s results have shifted the meter to the bullish side. There’s also some relief on the activist investor front.
Positive Catalysts
Lyft reported a surprising Q1 profit after previously operating at a loss. The company’s Q1 earnings came in at $2.6 million, or a penny a share. The company’s profitability is being driven by improved ridership, including a 16% year-over-year increase to over 218 million in the quarter, surpassing analyst estimates. Lyft offered a Q2 outlook on the upside of estimates, adding further fuel to the rally.
Lyft is not wasting any time, choosing to return value to shareholders right away in the form of a share buyback program. The Lyft board is looking to bolster its share buyback program by $250 million to $750 million, $500 million of which will be activated over the course of the next 12 months. In response, activist investor Engine Capital is putting its campaign against LYFT stock to rest.
What Now?
Lyft’s turnaround appears to be very company specific rather than any industrywide trend that would spill over to other ride-share stocks. But it still has the power to lift other boats, as industry peer Uber Technologies (NYSE: UBER) sees a fractional gain of 0.36% today.
Gerelyn Terzo is the author of dividend investing handbook "Dividend Investing Strategies: How to Have Your Cake & Eat It Too." A veteran financial journalist, she covers agri-finance for outlets like Global AgInvesting and the broader stock market and personal finance for 24/7 Wall Street. She began at CNBC and later helped launch Fox Business in New York. Gerelyn currently resides in Woodland Park, Colorado and dabbles in nature photography as a hobby.
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