(CTN News) – On Monday, Uber’s shares experienced a surge of over 5% following the announcement made by S&P Dow Jones Indices on Friday that the ride-hailing company has been chosen to join the S&P 500.
Although the official confirmation of Uber’s inclusion in the benchmark index is set for December 18, it is typical for the stock to rise as investors anticipate the addition to the portfolios of index funds that track the S&P 500.
Sealed Air Corp will be replaced by the S&P 500. Oppenheimer analysts have reiterated their outperform rating on the stock and have raised their price target to $75 per share from $65.
They believe that Uber’s entry into the S&P 500 will likely have a positive impact on investors’ sentiment towards returns.
In a note on Sunday, analysts stated that with the inclusion, UBER is expected to focus on growth and share buybacks, thereby boosting investor sentiment for growth and return in 2024.
According to S&P’s rules, members of the index must have positive earnings in the most recent quarter as well as over the prior four quarters in total.
Uber reported a net income of $221 million on $9.29 billion in revenue for its third quarter, and in the past four quarters combined, it generated over $1 billion in profit.
Furthermore, Uber’s market cap currently stands at approximately $118 billion, surpassing the S&P’s requirement of an adjusted market cap of at least $14.5 billion for inclusion.