Wedbush Securities lowered its rating on Lyft (LYFT) on Friday to Underperform from Neutral ahead of what it expects to be the year of the rise of the autonomous vehicle. While the firm thinks the near-term financial impact on established ridesharing platforms is limited, the expectation is that autonomous vehicles will disrupt the status quo.
Analyst Scott Devitt and his team think Lyft (LYFT) is at the most risk from the impact of AV disruption due to its exposure to the U.S. ridesharing market and undiversified offering mix. “While the company could carve out a specialized focus in the AV ecosystem, we think AV operators will opt for more 1P distribution. As a result, we believe the market is underestimating the negative terminal value impact that AVs may have on Lyft’s DCF value,” warned Devitt.
Notably, both Tesla (TSLA) and Waymo (WAYMO) were noted to be on the path to build AI infrastructure, data collection, and scale in 2026. Wedbush thinks Tesla (TSLA) will successfully launch robotaxis in over 30 cities in 2026 and start to scale volume production of Cybercabs.
Devitt also thinks that, absent the recent acquisitions, investor confidence in the company’s ability to reach their investor day targets has diminished.
Wedbush lowered its price target on Lyft (LYFT) to $16 from $20. The concern about Lyft’s (LYFT) standing in the autonomous vehicle race has also been voiced by other investment firms over the last few weeks.
Shares of Lyft (LYFT) fell 3.6% in premarket action to $19.15 vs. the 52-week range of $9.66 to $25.54.