Investors are betting on big returns for ride-hailing stocks in 2022.
The stock jumped nearly 6% on Thursday following the upgrade. The firm also ranked Lyft as a secondary pick, initiating coverage of the stock with a buy rating.
Uber has a "two-pronged approach" that makes it both a reopening and a stay-at-home trade, Joule Financial's chief investment officer, Quint Tatro, told CNBC's "Trading Nation" on Thursday.
"Their margins are going to increase as the ride-sharing movement comes back online," he said. "But the other side is that for those people that aren't comfortable, they have a huge deliveries segment that is doing exceptionally well."
Even so, now isn't the time to get in on the ride-hailing names, Tatro said.
Uber is down more than 30% year to date as the company continues to struggle with driver shortages. Rival Lyft has fallen over 20% in 2021.
"I think at this stage if you're looking to get back into these, you wait for a little pullback and then you add," he said.
Uber looks oversold to Miller Tabak's Matt Maley, but he's also staying on the sidelines for now.
"It's been making a series of lower highs and lower lows since February," the firm's chief market strategist said in the same interview. "It's going to have to move above $45 by the end of the month to really show that it has changed its trend."
Uber shares fell nearly 7% on Friday to around $35.50 a share, hitting lows not seen since November 2020.
Disclosure: Tatro and Joule Financial own shares of Uber.