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Investing.com - Truist Securities has reiterated its Buy rating on Dollar Tree (NASDAQ:DLTR) with a price target of $129.00, despite recent bearish sentiment surrounding the discount retailer. According to InvestingPro data, the stock, currently trading at $92.59, appears slightly undervalued based on its Fair Value analysis, with analyst targets ranging from $70 to $135.
The stock has declined approximately 15% since Dollar Tree’s second-quarter results, reflecting investor concerns about sequential sales slowdown and continued volatility in the company’s financial performance. However, recent momentum shows promise, with the stock posting an 8.88% gain over the past week and a substantial 25.61% return over the last six months.
Truist’s analysis suggests that while sales have indeed slowed since the second quarter, the firm’s proprietary card data indicates trends have remained "very consistent on a stacked (run-rate) basis."
Dollar Tree management has acknowledged to Truist analysts that they "need to improve financial consistency" in their operations going forward.
Truist expects Dollar Tree to provide a "relatively upbeat assessment" of its growth outlook, potentially forecasting 2%-4% comparable store sales growth and high single-digit to low double-digit earnings per share growth, along with operational details on multi-price point strategy, remodels, and capital allocation plans. The stock currently trades at a P/E ratio of 17.87, reflecting market expectations for future growth.
In other recent news, Dollar Tree has been at the center of several significant developments. The company broke ground on a new one million square foot distribution center in Marietta, Oklahoma, replacing a facility destroyed by a tornado in April 2024. This event was attended by notable figures, including Oklahoma Governor Kevin Stitt and U.S. Senator James Lankford. On the financial front, Dollar Tree’s stock rating was downgraded to Underperform by Jefferies, with a price target significantly reduced to $70.00 due to concerns over margins and operational complexities. Similarly, Bernstein lowered its price target to $100.00, maintaining a Market Perform rating, citing challenges in meeting financial targets, particularly in operating margins. Wells Fargo also adjusted its price target down to $115.00, maintaining an Overweight rating, as concerns arise over the company’s multi-price strategy and softened comparable sales. KeyBanc maintained its Sector Weight rating ahead of Dollar Tree’s investor conference, where consumer response to recent price increases is expected to be a key topic. These developments reflect a mix of strategic expansion and financial reassessment for Dollar Tree.
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