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HSBC upgrades Uber, Lyft to buy

HSBC upgraded its ratings of Uber Technologies Inc. and Lyft Inc. to buy from hold, CNBC reported Sept. 16, citing a note by analyst Masha Kahn.

According to the report, HSBC believes that the ridesharing business and food delivery service can be profitable for both companies.

"We think the ride-hailing businesses of Uber and Lyft can reach profitability if both pull back on sales & marketing and leverage the fixed cost base," Kahn reportedly wrote in the note.

The analyst added that they see room for only two large players in the ride-hailing and food delivery categories globally, and that they expect more consolidation in both sectors.

However, Kahn said the companies can still face headwinds in the form of higher regulatory risks and a lower longer-term growth outlook for their rides businesses.

HSBC revised its price target for Uber to $44 per share from $49 per share and Lyft to $62 per share from $67 per share, the report said.

Uber and Lyft shares closed up 3.55% and 3.67% to $34.43 per share and $47.79 per share on Sept. 16, respectively.