Wedbush downgrades Lyft on autonomous vehicle disruption risk

Investing.com -- Wedbush downgraded Lyft to Underperform from Neutral in a note on Friday, warning that 2026 could mark a turning point for the ridesharing industry as autonomous vehicles gain traction.

The firm also lowered its price target on Lyft to $16 from $20.

In a note led by analyst Scott Devitt, Wedbush argued that investors will increasingly focus on “the timeline in which AVs will expand to a greater share of consumers and the role that 3P distribution platforms like Uber and Lyft will play as the industry evolves.”

While Wedbush acknowledged the near-term financial impact may be limited, it expects autonomous vehicles to disrupt the current model over time. 

“In our view, Lyft is most at risk to the impact of AV disruption given the company’s exposure to the U.S. ridesharing market and undiversified offering mix,” Wedbush said.

The firm added that although Lyft could pursue a niche role in the AV ecosystem, “we think AV operators will opt for more 1P distribution,” leading Wedbush to believe “the market is underestimating the negative terminal value impact that AVs may have on Lyft’s DCF value.”

Wedbush also flagged weaker confidence in Lyft’s growth outlook. Excluding recent acquisitions, expectations for core business gross bookings imply a CAGR of 12.6% between FY24 and FY27, “-240bps below the company’s target of 15%,” according to Wedbush.

Looking ahead, Wedbush said 2026 could be a catalyst year for autonomous leaders, citing Waymo’s planned launches in at least 20 new cities and reports of Tesla operating robotaxi rides without a safety driver in Austin.