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Piper Sandler downgraded DoorDash (NYSE:DASH) to an Underweight rating from Neutral and upgraded Uber (UBER) to Overweight from Neutral in a notable pair trade posted by the firm on Monday.
Analyst Alexander Potter noted vehicle prices are near all-time highs and a quick reversion to historical pricing seems unlikely. Looking ahead, the Piper view is that cash-strapped consumers will increasingly opt to hail rides instead of trying to replace old cars.
"This trend should also benefit Overweight-rated LYFT and GETR. As a hedge against long positions in these stocks, we suggest selling DoorDash. While a beneficiary of increasing labor supply, DASH does not benefit from growing demand for ride-hailing."
The general takeaway is that DoorDash (DASH) will face more recessionary pressure on revenue and outside-the-box revenue streams are still seen being far off in the future. The price target of DASH was cut by Piper to $40 from $227.
Meanwhile, Lyft (LYFT) and Getaround (GETR) are seen being a notch below Uber (UBER) due to being more opex-intensive. Uber (UBER) is noted to be larger, more profitable, and expected to generate more cash in a recession.
Shares of DASH swung 0.77% lower in early trading on Monday. Uber (UBER) rallied 4.20%.