Uber’s spot in the benchmark index is not official until Dec. 18, according to a press release, but it is common for the stock to rise, since investors know that managers of index funds that track the S&P 500 will add it to their portfolios. Uber will replace Sealed Air Corp in the S&P 500.
Analysts at Oppenheimer reiterated their outperform rating on the stock and raised their price target to $75 per share from $65. They said Uber’s ticket into the S&P 500 will likely help improve investors’ sentiment about returns.
“Following the inclusion, we expect UBER to lean into growth and share buybacks, which should increase investor sentiment for growth/return in 2024,” the analysts wrote in a note Sunday.
Members of the index must have positive earnings in the most recent quarter and over the prior four quarters in total, according to S&P’s rules. Uber reported net income of $221 million on $9.29 billion in revenue in its third quarter, and in the past four quarters altogether, it generated over $1 billion in profit.
Uber also has a market cap of about $118 billion, which surpasses the S&P’s criteria that companies must have an adjusted market cap of at least $14.5 billion.
–CNBC’s Michael Bloom contributed to this report