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Investing.com - Guggenheim has reduced its price target on Dollar Tree (NASDAQ:DLTR) to $125.00 from $130.00 while maintaining a Buy rating on the stock. According to InvestingPro data, the stock is currently trading near its Fair Value, with a market capitalization of $20.45 billion.
The price target adjustment follows Dollar Tree’s recent underperformance against the S&P 500 by approximately 13%, which Guggenheim attributes primarily to softer comparable sales and below-consensus third-quarter EBIT/EPS guidance that overshadowed the company’s significant second-quarter earnings beat.
Guggenheim notes that investor concerns have been elevated regarding Dollar Tree’s multi-price point (MPP) strategy and its execution, though the firm characterizes the current volatility as "largely tariff-related" with impacts on both cost of goods sold and SG&A expenses.
The research firm projects a theoretical normalization of these tariff-related issues by mid-2026, barring any additional changes, and suggests that selective price adjustments of $0.25-0.50 are not fundamentally problematic to the company’s strategy.
Guggenheim’s revised price target is based on a multiple of 8.9 times its estimated 2026 EBITDA for Dollar Tree, with the firm emphasizing that while "patience will be required," it maintains its Buy rating on the stock.
In other recent news, Dollar Tree reported strong second-quarter earnings, with a 6.5% increase in comparable sales, surpassing both its own guidance of 3-5% and the consensus estimate of 4.6%. This performance was bolstered by better-than-expected margins due to strong leverage. In response to these results, several analyst firms have adjusted their price targets for Dollar Tree. JPMorgan raised its price target to $140, citing multiple growth drivers that could support long-term earnings growth. Truist Securities also increased its price target to $129, noting that Dollar Tree’s results exceeded their expectations. Morgan Stanley expressed confidence in the retailer’s revenue performance by raising its price target to $105. However, Piper Sandler lowered its price target to $108 while maintaining a Neutral rating. Meanwhile, Bernstein reiterated its Market Perform rating with a price target of $109, reflecting a balanced outlook on the company’s future. These developments highlight the varied analyst perspectives on Dollar Tree’s recent performance and future potential.
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