Key Takeaways

Oppenheimer analysts on Wednesday initiated coverage of Lyft ( LYFT ) with an "outperform" rating, writing that they expect the company to benefit as ridesharing continues "to challenge the rising cost of car ownership."

The analysts gave Lyft a $15 price target, a premium of about 38% to the stock's closing price Tuesday. Of the 15 analysts who currently cover Lyft tracked by Visible Alpha, four—including Oppenheimer—have "buy" or equivalent ratings, 10 have "hold" ratings, and one has a "sell" rating, with a price target range of $12 to $24.

Oppenheimer wrote that Lyft could benefit as younger, frequent users of its app continue to age and rely on its services as car ownership continues to get more expensive. They also said Lyft and rival Uber ( UBER ) should see lower costs as autonomous driving technology improves and the companies partner with self-driving vehicle makers to offer rides through their apps.

Also on Wednesday, Lyft announced a 175-million-euro ($199.1 million) acquisition of FREENOW, a ridesharing service that operates in nine countries in Europe, from BMW Group and Mercedes-Benz Mobility. Lyft said the deal is set to close in the second half of this year.

Shares of Lyft, which is set to report its latest quarterly results after the bell on May 8, were up about 2.2% in recent trading. They have declined roughly 40% in the past 12 months.

Read the original article on Investopedia