Overview
Morgan Stanley has reduced its price target for Lyft (NASDAQ:LYFT) to $17.00 from $22.50, while keeping an Equalweight rating on the stock. The new target is close to Lyft's then-current trading level of $16.85. InvestingPro data referenced in the market commentary suggests the share price may still trade below its Fair Value assessment, though Morgan Stanley's action reflects caution about Lyft's future growth path.
Growth concerns and peer comparison
The price-target cut stems from Morgan Stanley's view that Lyft's ride volumes have slowed, implying the company's U.S. rides business is now expanding at high single-digit rates. By contrast, Morgan Stanley estimates Uber's U.S. business is growing at mid-to-high teens, despite Uber being roughly 2.5 times larger than Lyft. The bank flagged this gap in growth rates as a central obstacle to Lyft establishing a more durable expansion trajectory, particularly as competition intensifies from Uber and from emerging autonomous vehicle services.
Financial outlook adjustments
Alongside the revised target, Morgan Stanley trimmed its 2027 Adjusted EBITDA forecast for Lyft by 12%, a reduction the firm said contributes materially to the lower price target while it retains a neutral rating on the shares. The bank's analysis points to a need for Lyft to close the growth differential if it is to justify higher valuation multiples.
Recent operating results
Lyft's reported fourth-quarter 2025 results were mixed. The company delivered earnings per share of $6.72, substantially above the $0.1255 consensus forecast. However, revenue of $1.59 billion fell short of the $1.76 billion expected by analysts. Over the prior twelve months, Lyft's revenue rose 14.9%, and analysts remain of the view that the company will report net income growth this year.
Peer analyst moves
The mixed quarter and the company's softer ride trends have prompted a number of analysts to revise their views. Wells Fargo lowered its price target to $18.00, pointing to ride volumes that grew 11%, a pace the bank described as below Lyft's guidance. Piper Sandler trimmed its target to $20.00 but maintained an Overweight rating, noting concerns about ride volumes despite bookings and EBITDA that were broadly in line. KeyBanc kept a Sector Weight rating, acknowledging solid bookings and EBITDA that nonetheless sat slightly under consensus. Guggenheim moved its price target to $22.00, highlighting a slowdown in ride growth in spite of an increase in gross bookings growth.
Implications
Taken together, the broker updates and the company's mixed quarterly performance underscore the tension Lyft faces between sustaining ride growth and contending with intensified competition in the U.S. rideshare market. Morgan Stanley's adjustments to both its price target and longer-term adjusted EBITDA forecast reflect a more cautious view on Lyft's near-term ability to regain faster growth momentum.
This article focuses solely on the facts and analyst commentary provided; it does not introduce additional forecasts or assumptions beyond those stated.