As we enter the fall months and look toward end of 2023 a variety of factors come into play for investors. Certainly market seasonality. And is the Fed done hiking interest rates?
Inflation and consumer spending numbers will also have an impact on market and investor sentiment.
Against this backdrop, my top large-cap stock pick for the remainder of 2023 is Uber Technologies (UBER) .
Uber is well known for its mobility division, which offers ridesharing, carsharing, taxis, and public transit in a variety of vehicle types. It offers drivers a financial partnership and is rapidly expanding its advertising business.
The company also operates a delivery division that serves restaurants, retailers, groceries, and others. Uber's third division is a logistic network that connects shippers and carriers in a digital marketplace.
Uber has been primarily focused on expanding its business since its founding in 2011, but in its most recent quarter, the company has made it clear that it is now focusing on profitability. The company is now expected to have its first annual profit in 2023 with earnings of $1.02 per share. Current estimates are for EPS to expand 59% in 2024 to $1.62.
The company has recently entered into an agreement with Domino's Pizza (DPZ) for Uber Eats delivery. It is expecting over $1 billion in advertising revenue in 2024.
What's more, we believe Uber is a likely candidate for inclusion in the S&P 500 after another quarter or two of profitability. Companies that were added to the S&P 500 from 2010 to 2023 averaged very strong performance in the year prior to inclusion, according to researchers at Bernstein.
Technically, the stock has formed a multi-year cup-with-handle on the long-term chart and a six-week cup-with-handle on the short-term chart. The key breakout level here is around $50. The stock may need some time to consolidate and form a handle, but the setup for a year-end run is strong.
