Shares of Lyft Inc LYFT jumped in early trading on Tuesday, after the company said its co-founders, Logan Green and John Zimmer, would transition to non-executive roles.
- DA Davidson analyst Tom White maintained a Neutral rating and price target of $12.50.
- Bernstein analyst Nikhil Devnani reaffirmed a Market Perform rating and price target of $12.00.
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- The co-founders stepping aside as CEO and President “will prove to be a net positive for LYFT shares over the next 12-18 months,” White said in a note.
- David Risher, who has served at Microsoft Corp MSFT and Amazon.com Inc AMZN, will become CEO.
- While it is “too early” to estimate the impact of this decision, it could prove positive “if it signals an increased willingness to broaden LYFT’s strategic aperture a bit in areas such as product strategy (maybe delivery?), partnerships, or other ways to create value for equity holders,” the analyst stated.
- Given recent stock performance and challenges, the latest change to in the management team “is understandable,” Devnani said.
- “This can be a positive change for the company as it looks to get back on track after a tough 2022,” the analyst wrote. He added that Wall Street will be interested in knowing the new CEO’s approach to gaining a competitive edge versus Uber Technologies Inc UBER and “getting the business to sustainable, positive FCF.”
LYFT Price Action: Shares of Lyft jumped by 6.82% to $10.26 at the time of publication Tuesday.
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