Uber’s (NYSE: UBER) stock experienced a rise of over 2% on Monday, December 4, following S&P Dow Jones Indices’ announcement that the ride-hailing company has been chosen to be included in the S&P 500.
While Uber’s inclusion in the benchmark index will be official on December 18, is more than a mere ceremonial change. Historically, inclusion in the S&P 500 leads to an increase in stock value as index funds tracking the S&P 500 typically add these stocks to their portfolios, boosting demand.
Following S&P’s regulations, companies included in the index must collectively report positive earnings in the latest quarter and the preceding four quarters. Additionally, constituents of the index are required to maintain an adjusted market capitalization of at least $14.5 billion.
On its previous close on December 4, UBER traded at $58.63 per share. It gained 2.23% in the 24-hour period, adding to a 4.83% increase in value over the past five days.
Wall Street’s forecast for UBER
Notably, Wall Street analysts’ average 12-month price objective for UBER currently stands at $62.82, implying around 7.15% further upside compared to the current share price.
The stock has an average analyst rating of ‘Strong Buy,’ based on 34 ‘Buy’ recommendations, while none advised ‘Hold’ nor suggested a ‘Sell.’ Analyst forecasts indicate growing optimism, with some predictions reaching as high as $75.
Oppenheimer’s analysts have reaffirmed their stock outperform rating and increased their price target from $65 to $75 per share. Uber’s entry into the S&P 500 will likely enhance investor sentiment regarding returns and attract more institutional investment, further solidifying its market position.
As Uber prepares to join the S&P 500, the overall sentiment among Wall Street analysts remains highly positive. With its robust business model and strategic market positioning, Uber’s stock appears well-poised for potential growth in the coming year.
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