The outlook for Uber has improved, and that should lead to a better stock performance in 2023, according to Piper Sandler. Analyst Alexander Potter upgraded shares to overweight from neutral, saying rising inflation will spur consumers to favor ride-hailing to purchasing expensive cars. “Vehicle prices are near all-time highs, and a quick reversion to historical pricing seems unlikely. As a result, we think cash-strapped consumers will increasingly opt to hail rides instead of trying to replace old cars,” Potter wrote in a Sunday note. Shares of Uber dropped 41% in 2022, falling for a second consecutive year, as rising interest rates dented the growth prospects of many tech companies. Now, however, the ride-hailing service is looking like a favorable alternative for consumers challenged by rising prices and growing recession concerns — a trend that should also benefit shares of Uber-competitor Lyft, which has an overweight rating from the firm. “Expensive cars may force consumers to consider alternative forms of mobility. In November, the average price of a new car was ~$49k in the United States. And while used car prices have ‘rolled over’, the REAL price of buying a used car is still rising (at least if financed using a loan),” read the note. For the analyst, Uber is the “#1 way to invest in this theme.” While Uber has exposure to some risks, the firm’s “superior scale has allowed Uber to lever its overhead more effectively than peers.” Some challenges for Uber includes generating about 36% of its revenue from deliveries, which faces more recessionary pressure in 2023. The analyst’s $33 price target, up from $31, represents 25% upside for shares of Uber. The stock was up more than 2% in Monday premarket trading. Separately, Potter downgraded shares of DoorDash to underweight from neutral. The door delivery stock was down 3.8% in Monday premarket trading. —CNBC’s Michael Bloom contributed to this report.