Is There an Upside to Dollar Tree Stock with YTD Gains of 4%?


Aug. 31 2017, Updated 9:07 a.m. ET

A look at Dollar Tree’s stock performance

Dollar Tree Store (DLTR) stock rose 5.6% on August 24, 2017, after the company reported better-than-expected results and raised its guidance. The price surged another 2.4% on the next trading day. The company now sits at a YTD (year-to-date) gain of 4.2%.

Competitor Dollar General (DG) has recorded similar stock returns this year. The discount retailer has recorded YTD profits of 4.9% to date.

Variety store peers TJX Companies (TJX) and PriceSmart (PSMT), however, are in the red. They have fallen 4.6% and 2.6%, respectively, to date.

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Target price and potential upside

Dollar Tree is currently trading ~14.0% below its 52-week high. Wall Street expects the stock to rise ~12.0% to touch $89.91 over the next year. There have been several target price revisions for Dollar Tree stock since it posted its 2Q17 results. You can find out more about that in the next section.

Dollar Tree has a better upside than Dollar General, whose stock is expected to rise about 5.0% in the next 12 months.

TJX and PriceSmart, however, have better potentials than Dollar Tree stock. The stocks for the two companies are projected to rise 15.0% and 24.0%, respectively.

Investors looking for exposure to Dollar Tree through ETFs can consider the iShares Morningstar Mid-Cap Growth (JKH), which invests 1.1% of its total holdings in the company.


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