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On Wednesday, Truist Securities analysts reiterated their Buy rating on Dollar Tree stock (NASDAQ: NASDAQ:DLTR), maintaining a price target of $100. The firm’s analysis follows strong first-quarter results for the discount retailer, which saw a 5.4% increase in comparable sales. This growth was driven by a 2.5% rise in customer traffic and a 2.8% increase in average transaction size. According to InvestingPro data, the stock has shown significant momentum, gaining over 8% in the past week alone, with 8 analysts recently revising their earnings expectations upward for the upcoming period.
The analysts noted that Dollar Tree’s first-quarter margins and earnings before interest and taxes (EBIT) were in line with their forecasts. Despite the company’s guidance for second-quarter earnings per share (EPS) being below the consensus estimate, Dollar Tree expects a 5% increase in comparable sales for the quarter. The company also anticipates short-term pressures due to a shared services agreement, which are expected to ease in the second half of the year. With a current P/E ratio of 20x and a market capitalization of $20.3 billion, InvestingPro analysis suggests the stock is slightly undervalued relative to its Fair Value.
Dollar Tree has incorporated current tariffs into its outlook and has begun to accelerate shareholder returns. Additionally, the company has raised its full-year earnings guidance, indicating confidence in future performance. Truist Securities analysts believe Dollar Tree is well-positioned for further upward revisions to earnings and potential expansion of its valuation multiples.
The analysts expressed optimism about Dollar Tree’s prospects, suggesting that the retailer’s strategic moves and positive outlook could lead to continued growth. They remain confident in their Buy rating and the $100 price target for the stock.
In other recent news, Dollar Tree has seen a series of analyst updates and strategic developments. Truist Securities raised its price target for Dollar Tree stock to $100, citing positive sales trends and the upcoming sale of Family Dollar. Wells Fargo (NYSE:WFC) also increased its price target to $105, maintaining an Overweight rating, and highlighted Dollar Tree’s margin resilience despite tariff challenges. CFRA adjusted its 12-month price target to $92, maintaining a Hold rating, and noted Dollar Tree’s efforts to mitigate tariff impacts and expand multi-price points across stores.
Telsey Advisory Group raised its price target to $95, emphasizing Dollar Tree’s strategic initiatives, including the opening of 400 new stores in 2025. KeyBanc Capital Markets observed Dollar Tree’s price hikes from $1.25 to $2.00 on several items in April, reflecting the company’s adaptability in the face of tariff impacts. They also updated their EPS estimate for 2025 to $4.65, acknowledging stronger-than-expected first-quarter performance. Despite these positive trends, analysts have expressed concerns over tariff risks and elevated temporary labor costs.
Overall, Dollar Tree’s recent developments reflect a mix of strategic growth initiatives and challenges related to tariffs and import exposure. These updates come as Dollar Tree prepares to announce its first-quarter results, with analysts closely monitoring its performance and strategic execution.
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