Bank of America Securities analyst Robert Ohmes reiterated a Sell rating on Dollar Tree yesterday and set a price target of $75.00.
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Robert Ohmes has given his Sell rating due to a combination of factors impacting Dollar Tree’s business strategy and financial outlook. One of the primary concerns is the potential risks associated with Dollar Tree’s multi-price strategy, which could lead to increased expenses due to store complexity and possible competitive responses as the company expands into higher price point items. These factors could pressure margins and affect profitability.
Additionally, while Dollar Tree has outlined a promising three-year growth outlook with expectations of 12-15% EPS CAGR from fiscal years 2027 to 2029, the current performance metrics are less robust. The company’s third-quarter comparable sales are tracking at a modest 3.8%, with flat traffic, which is a decline from the previous quarter’s performance. Furthermore, despite Dollar Tree’s initiatives to improve store execution and optimize shelf space, the challenges in execution and the need for significant store refreshes indicate potential hurdles in achieving the projected growth targets. These concerns contribute to the cautious stance reflected in the Sell rating.
In another report released on October 7, Jefferies also downgraded the stock to a Sell with a $70.00 price target.
DLTR’s price has also changed moderately for the past six months – from $71.800 to $95.970, which is a 33.66% increase.