Uber (UBER) stock is rallying today after the ride-sharing company announced an accelerated share repurchase agreement with Bank of America. This agreement covers $1.5 billion of shares of the company’s common stock and is part of its current $7 billion share repurchase plan.
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The Uber share repurchase agreement goes into effect today with the company paying $1.5 billion to Bank of America. It will receive 18,578,727 shares of its common stock, which covers 80% of the shares in this repurchase agreement. The remaining shares will be based on the volume-weighted average price of the stock while taking into account discounts and other customary adjustments.
News of the agreement bolstered investor confidence this morning, causing shares to increase 4.56% during pre-market trading this morning. That builds on a 2.25% rise during the previous trading day and a 9.46% gain over the last year.
What’s Behind the UBER Stock Repurchase?
Uber Chief Financial Officer Prashanth Mahendra-Rajah, explained the reason for the accelerated stock repurchase agreement in a company statement. He claims UBER “stock is undervalued relative to the strength of our business, and we plan to accelerate our buybacks under the existing authorization as a result.”
Speaking further on the matter, the CFO says the deal “represents a value-enhancing deployment of capital, retiring over one percent of our market cap.” This comes amid “considerable momentum” in 2025. Uber plans to continue the significant scaling of its free cash flows, which allows it to “return meaningful capital to shareholders while still investing in growth.”
Is UBER Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Uber is Strong Buy based on 33 Buy and two Hold ratings over the last three months. With that comes an average price target of $93.35, a high of $120, and a low of $82. This represents a potential 44.53% upside for UBER shares.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
