Dublin — Uber Technologies drew a warm response from Wall Street after the firm posted its first-ever decline in rides, but said business is already starting to to recover.

Analysts particularly noted the resilience of Uber’s food delivery operation, Uber Eats, which mitigated the effect from the drop in passenger rides. Further diversification is seen as possible, with Citigroup considering partnerships and Morgan Stanley identifying add-on opportunities such as grocery delivery.

Uber CEO Dara Khosrowshahi said on Thursday that ride-hailing sales have increased for each of the past three weeks and are on track to do so again this week. Uber shares rose 6.2% in pre-market trading to $32.85, compared with Thursday’s close of $30.93. The stock has rebounded 109% from the record low hit on March 18.

Rival ride-hailing company Lyft rose 22% following its results on Thursday, although analysts had mixed reactions to the numbers.

Here’s a round up of analyst comments on Uber’s results:

Piper Sandler, Alexander Potter
(Neutral, price target cut to $33 from $39)

Thanks to diversification, Uber’s revenue declines will be less severe than they otherwise would be if the company were a ride-hailing pure-play. We expect this trend to continue, and although Uber Eats remains less profitable than ride-hailing, we think the food delivery business could experience structural, permanent, and largely favourable changes due to Covid-19.

KeyBanc, Edward Yruma
(Overweight, price target $40)

Similar to Lyft, rides are improving week-on-week, and this should accelerate as shelter in place begins to dissipate.  Recovery will not be linear, but we believe that Uber is well-positioned to emerge post-coronavirus as the company has maintained driver supply and engagement with users through the Eats platform.

Citi, Itay Michaeli

We believe a positive share price reaction is warranted as the first quarter delivered reassuring data points amid the current crisis, while supporting the case for a stronger overall network position. Looking ahead, one area we’re watching after the Uber Jump-Lime transaction is whether Uber might also consider pursuing a similar strategy with autonomous vehicles (advanced technology group), as this could have both strategic and financial implications.

Morgan Stanley, Brian Nowak
(Overweight, price target raised to $47 from $43)

Importantly, Uber is addressing safety, including masks, cleaning supplies, and technology integration to ensure people are wearing masks. Safety is likely to be an important competitive point for riders and drivers in a world before there is a Covid-19 vaccine.

MKM Partners, Rohit Kulkarni
(Buy, price target cut to $38 from $45)

The key highlight from the conference call was two-fold: first, during April, Uber noticed week-on-week improvement in rides bookings while Uber Eats bookings accelerated; and second, Covid-19 has pushed out Uber’s profitability by “quarters” instead of “years”. Uber’s market opportunity is clearly expanding (food delivery) while the company is sowing seeds into more growth segments.