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Dollar Tree versus Dollar General: Stock Upside

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Is there an opportunity knocking?

Dollar Tree (DLTR) and Dollar General (DG) have seen high volatility over the past year. Dollar General, which was trading at $94.90 as of June 8, has traded between the $65.97 and $105.82 over the last 12 months. Dollar Tree, now priced at $82.63, has been slightly more volatile. It moved within a 52-week range of $65.63–$116.50.

While Dollar General is sitting at about 12.8% below its 52-week high price, Dollar Tree is 42% below its high point. So, is there any upside attached to the current stock prices? Let’s see what Wall Street thinks.

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Recent price revisions

The recent earnings misses by Dollar Tree and Dollar General resulted in a host of target price revisions for both companies.

Some brokers who cut price targets for DG include Citigroup (from $114 to $108), Credit Suisse ($103 to $93), Telsey Advisory ($120 to $110), and Raymond James ($105 to $100).

Dollar Tree faced steeper price cuts. Citibank reduced its price target from $104 to $90, Oppenheimer lowered its target price from $108 to $91, UBS cut its target price from $125 to $113, and Credit Suisse cut its target price from $114 to $93.

Stock upside

Despite the target price cuts, both companies continue to have strong upsides. Wall Street has set an average target price of $105.38 on Dollar General, reflecting an upside of 12% over the next year. Individual price targets on the company range between $80 and $120.

Dollar Tree has an average price target of $104.33, reflecting an upside of 27%. Individual price targets for the company range between $81.96 and $130.

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