Street Calls of the Week
Investing.com - Bernstein SocGen Group has raised its price target on Dollar Tree (NASDAQ:DLTR) to $103.00 from $100.00 while maintaining a Market Perform rating. The retail giant, currently valued at $19.57 billion, has shown strong momentum with a 31% gain over the past six months, according to InvestingPro data.
The firm’s adjustment comes as Dollar Tree has moderated its comparable sales expectations for fiscal years 2025-2028 to 3-4%, down from the mid-single digit growth projected for fiscal years 2023-2025 at its 2023 Investor Day.
Bernstein analyst Zhihan Ma noted that while the revised 3-4% target doesn’t appear overly aggressive, the firm remains cautious given Dollar Tree’s recent comparable sales deceleration.
The research firm expects Dollar Tree to face challenging year-over-year comparisons as macroeconomic tailwinds potentially diminish next year, projecting below-trend comparable sales of 2.3%.
Bernstein anticipates Dollar Tree’s comparable sales will eventually rebound to around 3% after working through these tougher comparison periods.
In other recent news, Dollar Tree reaffirmed its third-quarter and fiscal 2025 outlook, projecting earnings per share (EPS) growth of 12-15% annually from fiscal 2026 through 2028. The company detailed its operational strategy at its 2025 Investor Day, emphasizing long-term EPS growth targets of 8-10% bolstered by cost reductions. Additionally, Dollar Tree has partnered with Legion Technologies to implement a workforce management platform across its North American operations, which includes more than 9,000 stores and 18 distribution centers. This partnership aims to serve approximately 150,000 associates more efficiently.
In terms of analyst ratings, Truist Securities reiterated its Buy rating for Dollar Tree with a price target of $129.00, despite recent concerns about sales slowdown and financial volatility. KeyBanc has maintained a Sector Weight rating, noting potential opportunities and challenges, particularly regarding consumer reactions to price increases. These developments come as Dollar Tree continues to focus on growth and operational improvements following its separation from Family Dollar.
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