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On Thursday, Truist Securities analysts raised the price target for Dollar Tree stock (NASDAQ:DLTR) to $109 from $100, while maintaining a Buy rating. According to InvestingPro analysis, the stock appears undervalued at its current price of $88.62, with a market capitalization of $18.62 billion. The analysts noted Dollar Tree’s strong first-quarter performance, which included a comparable sales increase of 5.4%, driven by a 2.5% rise in customer traffic and a 2.8% increase in average transaction value. This momentum is reflected in the stock’s impressive 22.13% return over the past six months, though InvestingPro data shows 8 analysts have recently revised their earnings expectations downward. Get access to 6 more exclusive ProTips and comprehensive analysis in the Pro Research Report.
Despite the positive sales momentum, Dollar Tree’s second-quarter earnings per share guidance was lowered. This adjustment was attributed to temporary factors, though the company maintained a projected comparable sales growth of 5% for the quarter. The stock currently trades at a P/E ratio of 19.08, with an overall Financial Health Score of "FAIR" according to InvestingPro metrics.
The analysts highlighted that several costs impacting the company’s financials are expected to diminish by the calendar year 2026. These include a shared service agreement costing $0.30 per share this year and a reduction in temporary labor expenses, estimated at $0.15 per share.
Additionally, Dollar Tree plans to offset the impact of tariffs in the second quarter through strategic measures such as price increases, which are anticipated to provide ongoing benefits.
With these factors in mind, Truist Securities expressed confidence in Dollar Tree’s sales momentum and potential for strong earnings per share growth, reinforcing their aggressive buying stance on the stock.
In other recent news, Dollar Tree’s first-quarter results have prompted several analysts to adjust their evaluations of the company’s stock. JPMorgan upgraded Dollar Tree from Neutral to Overweight, citing the company’s growth potential and raising the price target to $111. Piper Sandler also increased their price target to $93, maintaining a Neutral rating, while Loop Capital raised theirs to $85 but expressed concerns about future earnings, maintaining a Hold rating. BMO Capital adjusted their price target to $85, highlighting strong first-quarter sales but remaining cautious about long-term merchandising quality. Wells Fargo (NYSE:WFC) reiterated their Overweight rating with a price target of $105, citing potential short-term earnings risks but expressing confidence in long-term prospects.
Dollar Tree’s first-quarter performance exceeded expectations, with a notable 5.4% increase in comparable store sales. However, analysts have expressed concerns about the company’s ability to manage tariffs and other costs in the coming quarters. The potential sale of Family Dollar is seen as a positive development by some analysts, potentially benefiting Dollar Tree’s cost structure. Despite these challenges, Dollar Tree’s management anticipates improved profitability in the latter half of the year. The company’s strategic initiatives, including tariff mitigation and store expansion, are seen as key factors for future growth by analysts like JPMorgan.
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