Target (TGT) is sending a positive signal to investors following its partnership with e-commerce platform Shopify (SHOP), UBS said Tuesday in a report.
The retailer agreed to sell products from Shopify on the digital Target Plus marketplace. With the partnership, Target is seen driving e-commerce growth, the investment firm said.
"There is a perception that the performance gap between Target's eComm and the likes of Walmart US eComm or Amazon is due to Target's lack of contribution from marketplace," UBS said. "This partnership should change that perception for the better."
The partnership may drive topline growth through the remainder of 2024, and "should make a growing contribution to the retailer's overall comp as it integrates new merchants and offers more SKUs [stock-keeping units] on its website," UBS said.
UBS said the partnership may help improve the online shopping experience for Target's customers and prompt Shopify sellers to tap Target as an outlet.
UBS has a buy rating on Target with a price target of $185.
Target shares fell 1.9% in recent trading Tuesday.
Price: 146.91, Change: -2.78, Percent Change: -1.86
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