YTD rise in DLTR
Dollar Tree (DLTR) stock fell 3.3% on April 8 in reaction to the news that Starboard Value had withdrawn its group of director nominees for Dollar Tree’s board, putting an end to the proxy battle.
Even after yesterday’s fall, Dollar Tree stock has risen 13.4% on a YTD (year-to-date) basis as of April 8. Rival Dollar General (DG) stock has risen 13.2% on a YTD basis. However, both Dollar Tree and Dollar General lag the 15.5% YTD rise in the S&P 500 as of April 8.
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Recent analyst activity
On March 20, Telsey Advisory Group upgraded its rating for Dollar Tree to an “outperform” from a “market perform” and raised its price estimate to $117 from $103. Telsey Advisory Group raised its rating after a meeting with Dollar Tree’s management gave it clarity about the company’s turnaround plans for the Family Dollar business.
On March 20, Evercore ISI started its coverage of Dollar Tree stock with an “in line” recommendation and an initial price target of $105.
On April 5, RBC raised its price target on the stock to $116 from $110. On April 8, Jefferies raised its price target to $100 from $94. On April 9, Credit Suisse increased its price target for the stock to $115 from $110.
The average 12-month price target of $109.40 on Dollar Tree stock reflects a potential upside of ~7% compared to the stock’s closing price of $102.44 on April 8.
Dollar Tree has announced an accelerated transformation plan for its Family Dollar stores, which includes plans to renovate to a new format and rebanner additional stores to the Dollar Tree brand. Analysts expect Dollar Tree’s adjusted EPS to fall 2.3% to $5.32 in fiscal 2019, while they expect its sales to rise 3.6% to $23.6 billion.