The continued rollout of COVID-19 vaccines bodes well for ridesharing app Lyft (LYFT -0.42%), particularly as summer approaches, because it means more people will be traveling again.
One analyst is so upbeat about Lyft's prospects that he put its stock on his "best ideas" list and raised his price target to $85 per share, suggesting there's 33% more upside from where Lyft's stock closed on Tuesday.
The latest data from the U.S. Centers for Disease Control and Prevention says over 109 million doses of the vaccine have been administered since the first one was introduced in December, representing more than 21% of the U.S. population. Some 2.4 million shots a day are being administered.
Wedbush analyst Daniel Ives told investors in a research note the continued progress being made in the COVID-19 fight will allow both Lyft and rival Uber Technologies an opportunity to see a "springboard of consumer demand bounce back."
Ives believes Lyft isn't the same company today that it was a year ago, as the pandemic forced the ridesharing service to slash expenses after people were required to stay indoors. As he explains it, the "profitability profile and leverage have essentially turned Lyft into a different company than it was pre-pandemic."
As a result, consumer travel will lead to a rebound occurring in the back half of 2021 because the effects of reopening will be stronger than expected. That will result in a Lyft that's more profitable and has a better shot at generating more revenue per rider.
Ives previously had a $72 price target on Lyft, 12.5% higher than its closing price yesterday, but with these tailwinds, he's raised his target to $85 and put the stock on his firm's "best ideas" list.