Lyft, Inc. (LYFT) shares rose more than 8% during Wednesday's session after management said that the coronavirus had little impact on its business thus far. JPMorgan analyst Doug Anmuth called shares "extremely compelling" following the comments from Lyft, noting the company's strong fundamentals. The analyst maintained an Overweight rating on the stock due to increasing double-digit growth in active riders and revenue per rider along with its "clear path" to profitability in 2021 – differentiating it from others.
The analyst's comments echoed those of Piper Sandler made after the market close on Tuesday. Alexander Potter reiterated his Overweight rating and price target of $63 per share on Lyft stock, citing management's comments about robust demand. The analyst believes that the coronavirus may be driving people away from public transit and toward ride-share options.
Uber Technologies, Inc. (UBER) shares followed Lyft shares higher amid speculation that the coronavirus could have a beneficial impact on ride sharing, but shares of both companies remain below their highs made earlier this year for the time being.
From a technical standpoint, the stock rebounded from reaction lows of around $36.00. The relative strength index (RSI) rebounded from oversold levels to neutral levels of 40.19, but the moving average convergence divergence (MACD) remains in a bearish crossover. These indicators suggest that the stock could see some consolidation before extending its move higher.
Traders should watch for some consolidation between reaction lows of $36.00 and the 50-day moving average at $45.59 over the coming sessions. While the MACD remains in a bearish trend, there could be a near-term bullish crossover that signals an intermediate-term change in trend. Traders will be keeping an eye on the evolving coronavirus situation in the meantime.
The author holds no position in the stock(s) mentioned except through passively managed index funds.