Lyft stock could see big gains as the ride-hailing company cuts costs and sees demand stabilize, KeyBanc said. Analyst Justin Patterson upgraded the stock to overweight from sector weight. He also set a price target of $24, representing a 55.7% upside from Monday’s close. “Ridesharing data appears to be stable in the Key First Look (KFL) data sample, with Lyft data actually improving during December,” Patterson said in a Monday note to clients. “As we do this with aggressive cost-cutting actions in recent quarters and continued recovery on the West Coast, we see meaningful opportunities to increase Lyft’s EBITDA through 2023.” Shares advanced 3.1% in pre-market trade. It has gained 39.8% so far in 2023 after falling 74.2% last year. Patterson raised its 2024 EBITDA outlook by 2% to $848 million, which beat the Wall Street consensus estimate of $828 million. He also took Lyft’s cost-cutting actions including a 13% layoff in early November to help push EBITDA. He said that the data shows that the operating environment has improved throughout the fourth quarter and can be taken to mean that growth has stabilized and will increase in 2023. On the driver side, Patterson said that the growth of app downloads has also stabilized and is now in line with Uber, leading analysts believe that the acquisition of drivers has normal. Patterson called the stock’s valuation attractive as it trades at 9 times its 2024 enterprise-value-to-EBITDA ratio, indicating teenage growth and margin expansion. He said that the current estimate value is due to cost saving initiatives and the recovery in the US west coast market. Of course, he said the stock can perform differently than expected if the price headwinds are worse than anticipated, the West Coast market does not recover as expected or if the cost cutting action does not provide rise to EBITDA. The upgrade reflects a more bullish stance compared to rival Uber, which Patterson rates in the sector’s weight. – CNBC’s Michael Bloom contributed to this report.