(CercleFinance.com) – Uber shares continue their upward movement on Tuesday, posting a fifth consecutive session of progress with a view to its upcoming inclusion in the S&P 500, the benchmark index for American fund managers.
The American mobility specialist, whose stock has already climbed 152% this year, is currently advancing 0.4%, bringing its market capitalization to more than $128 billion.
S&P Dow Jones Indices announced last week that Uber would enter the index starting Monday, December 18, which triggered a run on the stock.
This renewed interest – known as the ‘S&P 500 phenomenon’ – is likely to boost the price of the Californian group by forcing index fund managers – or ETFs – to integrate it in order to replicate the performance of the S&P 500 .
‘From a historical point of view, entry into the S&P index has generally proven beneficial in terms of market sentiment, without this in itself determining the performance of a stock’, recall the teams at XTB.
The broker thus recalls that since its integration into the S&P 500 at the end of 2020, Tesla shares have only increased by 19%.
According to XTB, it is above all the San Francisco company’s ability to improve its profit margins and cash generation that will determine its future performance.
‘Knowing that the group still has relatively low margins, a key element will be the continuation of its expansion and the achievement of economies of scale,’ underlines the broker.
Analysts note that Uber has continued to improve its profitability in recent times, with the group even posting a net profit of $221 million for the third quarter.
According to Bank of America, these good performances should continue into the fourth quarter, with the research firm saying today that it expects the group to outperform its sector at the end of the financial year.
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