The outlook for Uber has improved, and this will lead to better stock performance in 2023, according to Piper Sandler. Analyst Alexander Potter upgraded the stock to overweight from neutral, saying that rising inflation will prompt consumers to buy more expensive cars. “Vehicle prices are near all-time highs, and a quick reversion to historical prices seems unlikely. As a result, we think cash-strapped consumers will increasingly choose to hail rides instead of trying to replace their old cars,” Potter wrote in Sunday’s note . Uber shares are down 41% in 2022, down for the second year in a row, as rising interest rates dampen the growth prospects of many tech companies. But now, the ride-hailing service is seen as a viable alternative for consumers challenged by rising prices and growing recession concerns — a trend that should also benefit Uber competitor Lyft, which has an overweight rating from the company. “Expensive cars can 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’, the REAL price of buying a used car is still rising ( at least if it is financed with loans),” read the note. For analysts, Uber is “the #1 way to invest in this theme.” While Uber faces some risks, the company’s “superior scale has allowed Uber to raise overhead more effectively than its peers.” Some of the challenges for Uber include generating about 36% of its revenue from deliveries, which is facing the pressure of a recession in 2023. Analysts’ price target of $33, from $31, represents a 25% upside for Uber shares. The stock was up more than 2% in premarket trading Monday. Separately, Potter cut DoorDash stock to underweight from neutral. The door-to-door delivery stock fell 3.8% in pre-market trading Monday. — CNBC’s Michael Bloom contributed to this report.