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Investing.com - Guggenheim raised its price target on Dollar Tree (NASDAQ:DLTR) to $130.00 from $100.00 on Monday, while maintaining a Buy rating on the stock. The retailer, currently trading at $114.27 with a market capitalization of $24 billion, has shown strong momentum recently.
The price target increase represents a 30% premium over both the firm’s previous target and the current sell-side consensus. Guggenheim’s new target is based on a 10.6x multiple of its 2026 earnings estimate. InvestingPro data shows analyst targets ranging from $70 to $138, reflecting diverse market opinions on the stock’s potential.
Dollar Tree shares have significantly outperformed the S&P 500 over the past three months, driven by tariff relief and the completion of the Family Dollar divestiture, according to Guggenheim.
The firm cited the validation of Dollar Tree’s multi-price point (MPP) concept, which has delivered broad-based 5-7% comparable sales growth over six months, as a key factor in its bullish outlook. This performance, combined with the divestiture of the "challenged" Family Dollar business, supports Guggenheim’s confidence in a 10% EBITDA growth trajectory.
Guggenheim also noted that Dollar Tree’s 2026 earnings are expected to benefit from the elimination of $225 million in non-recurring profit and loss impacts, suggesting the stock could potentially reach $150 if current multiples hold on future earnings.
In other recent news, Dollar Tree has announced the completion of its Family Dollar business sale to private investment firms Brigade Capital and Macellum Capital for approximately $1 billion. This transaction is anticipated to generate about $800 million in net proceeds and a cash tax shield of approximately $375 million. Following this sale, Barclays (LON:BARC) upgraded Dollar Tree’s stock from Equalweight to Overweight, citing a "cleaner growth story" and raising its price target to $150. UBS also increased its price target to $127, maintaining a Buy rating, after meetings with the company’s leadership team. Wells Fargo (NYSE:WFC) raised its price target to $130, reflecting confidence in Dollar Tree’s multi-price strategy. Additionally, Dollar Tree’s Board of Directors replenished the company’s share repurchase authorization to $2.5 billion, restoring the limit set in September 2021. Approximately $450 million remained under the prior authorization at the end of its fiscal 2025 first quarter. These developments highlight the company’s strategic moves and analysts’ positive outlooks on its growth potential.
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