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On Thursday, KeyBanc analysts reiterated a Sector Weight rating for Dollar Tree stock (NASDAQ: DLTR), currently valued at $18.62 billion. According to InvestingPro analysis, the stock appears undervalued at current levels, with 8 analysts recently revising their earnings expectations upward. The decision follows Dollar Tree’s first-quarter performance, which exceeded expectations in comparable sales and earnings per share (EPS).
Dollar Tree reported a 5.4% increase in comparable sales for the first quarter, driven by strong performance in ticket, traffic, discretionary, and consumables categories. The company, trading at a P/E ratio of 19.08 and generating $18.05 billion in revenue, has shown robust performance across multiple timeframes. This aligns with KeyBanc’s proprietary data and channel checks, as well as the positive impact of the Easter holiday. Despite these positive results, the company continues to face challenges related to tariffs.
Looking ahead, Dollar Tree management anticipates second-quarter comparable sales to reach the upper end of the full-year guidance range of 3-5%. However, they expect a decline in EPS by 45-50% before an anticipated acceleration in the second half of the year. The company also reiterated its sales guidance for 2025 and raised its EPS forecast, reflecting over $500 million in repurchases year-to-date.
While KeyBanc analysts view the company’s opportunities to drive EPS positively, they caution that risks remain from tariffs, competition, and factors impacting low-end consumers. Despite this, the underlying EPS outlook for Dollar Tree appears positive, although the degree of acceleration expected in the second half of the year may be questioned by investors.
In other recent news, Dollar Tree Inc . (NASDAQ:DLTR) reported its first-quarter 2025 earnings, exceeding analysts’ expectations with an adjusted earnings per share (EPS) of $1.26, surpassing the forecast of $1.21. The company achieved a notable year-over-year revenue growth of 11.3%, although the revenue of $4.6 billion fell short of the $4.72 billion forecast. Dollar Tree’s comparable store sales grew by 5.4%, indicating strong consumer demand. The company’s strategic initiatives, including the expansion of the MultiPrice 3.0 store format, contributed positively to its performance. Analysts at Telsey raised the price target for Dollar Tree stock to $100 from $95, maintaining a Market Perform rating, due to the company’s transformation progress. The MultiPrice 3.0 format is now in about 3,500 stores and is expected to be in half of all stores by the end of 2025. Additionally, Dollar Tree added approximately 2.6 million new customers in the first quarter, with a significant number from upper-income households. The company plans to convert half of its stores to the MultiPrice 3.0 format by year-end, reflecting its ongoing transformation efforts.
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