BMO Capital analyst Kelly Bania downgraded Dollar Tree to Market Perform from Outperform with a price target of $68, down from $130. The firm says it no longer has conviction in the company’s outlook to justify an Outperform rating following the Q2 miss. The analyst sees a more balanced outlook on valuation given peer valuation contraction with risk lower towards a drug and grocery valuation if Dollar Tree banner comps go flat or negative. The company’s competitive dynamics could still get worse as competitors are investing in price and there are potential regulatory headwinds from either tariffs or labor cost headwinds which could further weigh on the company’s 2025, the analyst tells investors in a research note.
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