Uber and Lyft Stocks Upgraded on Profit Potential

Options are already popular on both stocks

Uber Technologies Inc (NYSE:UBER) and LYFT Inc (NASDAQ:LYFT) are both trading higher today following bullish analyst attention. HSBC released a note upgrading each stock to "buy," saying sentiment has turned bearish on UBER and LYFT shares, especially due to last quarter's poorly received numbers. The brokerage firm also said it was possible for the companies to reach profitability if they properly cut costs.

UBER was last seen up 5.8% at $34.59, pushing for its best close since mid-August. HSBC set a $44 price target on the stock, which on Friday found support at the 20-day moving average. Most other analysts are also bullish on the ride-hailing platform, with 21 of 26 handing out "buy" or "strong buy" recommendations.

Call options are already popular this morning, trading at two times the pace expected. Most popular is the September 35 call, while new positions are opening at the September 36 call. It'spossible traders are buying the positions to try and profit on more upside in the security by Friday's close, when the contracts expire.

LYFT, meanwhile, is 5.7% higher at $48.73, testing its 20-day moving average. The brokerage firm set a $62 price target on the equity, which is actually a decent bit below the average analyst price target of $73.06. LYFT's call options are also trading at a hot rate right now, with new positions opening at the weekly 9/27 48.50-strike call.