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UPDATE 1-Analysts at Lyft underwriters say buy falling stock

(Adds analyst comment, details)

April 23 (Reuters) - Wall Street's public opinion of Lyft Inc took a major turn for the positive on Tuesday, after analysts at many of the banks that worked on its initial public offering urged clients to buy the ride hailer's underperforming shares.

After the required 25-day wait for deal underwriters to issue an investment opinion following an IPO, at least eight of the banks that brought Lyft public last month came out with bullish recommendations on a stock that has slumped around 30 percent from its opening price on its first day of trading.

Before Tuesday, only banks not working the deal were permitted to offer recommendations on the stock, and the balance of opinion among that group was decidedly more skeptical. Only four of them had recommended Lyft as a "buy," or the equivalent, while six initiated the stock as a "hold" and one as a "sell."

Despite regulations that separate investment banking and research operations, it is rare for analysts at banks that have participated in an IPO to issue a bearish view on a stock when they issue their initial opinions.

Shares of Lyft rose as much as 3 percent in trading before the bell, but rose only marginally soon after Wall Street's official open.

"We still believe the company has more wood to chop to get credibility from the Street but the selling pressure over the last few weeks seems to be abating," said Daniel Ives, managing director, equity research at Wedbush Securities, who did not participate in the underwriting.

By the opening bell, at least 11 brokerages whose investment arms underwrote the deal, including Jefferies, JP Morgan and Piper Jaffray, had initiated coverage of Lyft with "buy" or equivalent to "buy" ratings.

Piper Jaffray expected "solid near-term top line results", saying Lyft had been gaining market share in recent quarters, but believed that the path to positive net income would be a "multi-year journey". It initiated coverage with an overweight rating and target price of $78.

At Monday's prices, Lyft had a stock market value of around $17 billion. Both it and Uber have warned that they may never become profitable, making it difficult for investors to estimate how much they might be worth.

Most of the analysts were confident of Lyft's long-term fortunes, despite the competition from Uber on U.S. streets and among stock market investors.

"Uber's filing has added pressure, and we acknowledge that the upcoming roadshow could create more near-term uncertainty, but we believe Lyft continues to execute well," said Doug Anmuth, an analyst at JP Morgan.

Reuters has reported that Uber plans to sell around $10 billion worth of stock at a valuation of between $90 billion and $100 billion. Its IPO is on track for some time in May.

At least six of Lyft's underwriters, including Canaccord, Cowen and JMP Securities, are also backing the Uber deal, according to SEC filings.

Currently, 14 of 21 analysts covering Lyft rate the stock a "buy" or stronger, seven are "neutral" and one recommends "sell". (Reporting by Noel Randewich in San Francisco and Jasmine I S in Bengaluru; Editing by Bernard Orr)