Food delivery and ride-sharing platform Uber Technologies, Inc. (UBER – Get Rating) has been making headlines with its recent developments and performance in the market. However, the company faces inflation-related challenges and a potential economic slowdown in major global economies.
Therefore, I think it might be ideal to exercise caution and wait for a better entry point in the stock.
Since March 2022, the Fed has raised its benchmark borrowing rate ten times to a targeted range of 5%-5.25%. During this period, the labor market has shown resilience, with nonfarm payrolls climbing by nearly 1.60 million in 2023.
While inflation has declined from last year’s peak level, it is higher than the Fed’s target of 2%, which might prompt the Fed to rate hikes further. Moreover, as per the World Bank, higher rates and overhangs from this year’s banking crisis are expected to drastically slow economic growth for the biggest global economies.
The institution said advanced economies, the U.S., Japan, and Euro area countries, are expected to grow by only 0.7% in 2023, down from 2.6% in 2022.
The stock has gained 65.8% year-to-date and 7.3% over the past month to close its last trading session at $40.99. The stock has a 24-month beta of 1.20.
Here are the factors that could affect UBER’s performance in the near term:
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