Lyft Plunges 10.5% as BofA Downgrades on AV Partnership Concerns

On April 3, 2025, Lyft's stock experienced a significant drop of 10.5% in pre-market trading, reflecting a notable shift in investor sentiment.

Bank of America (BofA) has downgraded Lyft's stock rating to "Underperform" and slashed its price target to $10.50. The firm cited a lack of confidence in Lyft's near-term upside due to the absence of scalable autonomous vehicle (AV) partnerships that are ready to drive significant growth.

Lyft recently reported its fourth-quarter earnings, showcasing a 15% growth in gross bookings to $4.3 billion and a 27% increase in revenue year over year to $1.55 billion. Despite these positive financial results, the market's focus on Lyft's AV partnerships and their readiness has overshadowed the earnings report.

Consumer confidence has been at its lowest level in more than four years due to fears of sticky inflation and a weakening economic backdrop. This broader economic uncertainty has likely contributed to the sell-off in Lyft's stock, as investors become more risk-averse.