Most people think of Dollar General (DG) when they think of discount retailers. Discount retailer Dollar Tree (DLTR) would like to say something about that, however, and get shoppers thinking about it for its low-cost alternatives. To that end, Dollar Tree partnered with Uber Eats (UBER) to set up a new delivery program. This had little impact for shareholders, though, who sent shares down nearly 2% in Friday morning’s trading.
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Uber has placed several thousand Dollar Tree locations in with Uber Eats, allowing people to order Dollar Tree goods and have them delivered to their homes or similar locations, usually that same day. The move also gives Uber greater access to the rural market, which is one of Dollar Tree’s main selling markets.
Brent Beebe, Dollar Tree’s senior vice president of retail merchandising, noted, “Bringing Dollar Tree to the Uber Eats platform means customers can now enjoy the great value and everyday essentials they count on, plus the thrill of discovering those unexpected treasures – all with the convenience of same-day delivery.”
A Better Buy Than You May Think
While some consider the discount clothes and food to be good buys, others are looking at Dollar Tree’s stock. In fact, Telsey Advisory Group’s Joseph Feldman—who has a five-star rating on TipRanks—noted that this was a good time to buy in.
Feldman upgraded the stock from Market Perform to Outperform, and also hiked the price target from $100 to $130 per share, a move that represented a roughly 16% upside against the closing price on Thursday. Feldman had particularly good things to say about the stock since it sold Family Dollar, a move that left it with a “…cleaner story.” Plus, more products with more price points, and more stores, should help fuel “…multi-year growth.”
Is Dollar Tree Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on DLTR stock based on nine Buys, 10 Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 33.15% rally in its share price over the past year, the average DLTR price target of $113.67 per share implies 3.1% upside potential.
