Citi upgraded Dollar Tree (DLTR) to Buy from Neutral with a price target of $103, up from $76. With 50% of the company’s product subject to significantly higher tariffs, the market reaction “was extremely and unsurprisingly negative,” the analyst tells investors in a research note. However, Citi believes the higher-tariff-across-the-board environment is going to be a positive for Dollar Tree. The higher tariff regime gives the company cover to further expand price points from $1.25 to $1.50 or $1.75, the analyst tells investors in a research note. Citi believes it will be an easier move than when it had to “break the buck” in 2022. The firm sees Dollar Tree as winner in an environment where retail prices are going higher.
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