Uber shares pop as company is slated to join S&P 500

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Shares of Uber closed up more than 2% on Monday after S&P Dow Jones Indices announced Friday that the ride-hailing company has been selected to join the S&P 500.

Uber's spot in the benchmark index is not official until Dec. 18, according to a press release, but it is common for the stock to rise, since investors know that managers of index funds that track the S&P 500 will add it to their portfolios. Uber will replace Sealed Air Corp. in the S&P 500.

Analysts at Oppenheimer reiterated their outperform rating on the stock and raised their price target to $75 per share from $65. They said Uber's ticket into the S&P 500 will likely help improve investors' sentiment about returns.

"Following the inclusion, we expect UBER to lean into growth and share buybacks, which should increase investor sentiment for growth/return in 2024," the analysts wrote in a note Sunday.

Members of the index must have positive earnings in the most recent quarter and over the prior four quarters in total, according to S&P's rules. Uber reported net income of $221 million on $9.29 billion in revenue for its third quarter, and in the past four quarters altogether, it generated more than $1 billion in profit.

Uber also has a market cap of about $118 billion, which surpasses the S&P's criteria that companies must have an adjusted market cap of at least $14.5 billion.

— Our's Michael Bloom contributed to this report.

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