Market News

Uber Deepens Partnership with Rite Aid; Street Says Buy

Uber Technologies, Inc. (UBER) and Rite Aid (RAD) have expanded their partnership deal to offer Rite Aid products through Uber Eats. With this deal, customers will now be able to order and receive healthcare and grocery items from the comfort of their homes.

Uber offers services like ride-hailing, food delivery, package delivery, couriers and freight transportation.

The customers will have access to the full catalog of healthcare and grocery products that local Rite Aid store offers. Notably, the deal allows Uber Pass and Eats Pass customers to enjoy free delivery and additional 5% discount on all orders above $15. (See Uber stock chart on TipRanks)

The Global Head of Grocery and New Verticals at Uber, Raj Beri, said, “Convenience is a key component of Uber’s delivery strategy, allowing us to create a seamless delivery experience by ensuring we have the essential stores and products customers need.”

On September 22, Needham analyst Bernie McTernan reiterated a Buy rating on Uber with a price target of $77 (upside potential of 65.1% from current level).

McTernan said, “In Delivery, we think Uber can grow is share of bookings by expanding into new verticals with a buy over build strategy that allows for quick penetration. We foresee the company’s Mobility business benefiting from its Uber Pass subscription. We also think the company’s subscriptions would benefit from a more aggressive pursuit of acquisitions.”

Overall, the Street is bullish on the stock and has a Strong Buy consensus rating based on 23 Buys and 2 Holds. The average Uber price target of $68.75 implies upside potential of about 47.4% from current levels.

Furthermore, Uber scores a “Perfect 10” from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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