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Dollar Tree: JPMorgan Chase Upgraded the Stock to ‘Overweight’


Jun. 11 2019, Updated 12:27 p.m. ET

Rating upgrade

Dollar Tree (DLTR) stock has risen 2.9% as of 11:24 AM EST on June 11. JPMorgan Chase upgraded the stock to “overweight” from “neutral.” JPMorgan Chase increased its target price for Dollar Tree stock to $122 from $82. The new price target indicates an upside of over 17% compared to the closing price on June 10.

For Dollar Tree, JPMorgan Chase sees an inflection to high-single net income growth and a low-double-digit EPS growth beyond fiscal 2019. The growth is supported by continued stability in the company’s Dollar Tree banner and the improved Family Dollar banner.

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Recent performance

Dollar Tree beat analysts’ sales expectations for the first quarter, which ended on May 4. The company’s sales grew 4.6% to $5.81 billion compared to analysts’ forecast of $5.78 billion. Dollar Tree’s overall same-store sales grew 2.2% due to same-store sales growth of 2.4% in the Dollar Tree banner and same-store sales growth of 1.9% in the Family Dollar banner. Dollar Tree’s initiatives to improve the Family Dollar business, including significant investments in remodeling Family Dollar stores, helped deliver the highest same-store sales growth for the Family Dollar banner since its acquisition in 2015.

Dollar Tree’s growth investments lowered its first-quarter adjusted EPS 4.2% to $1.14. However, the first-quarter EPS was in line with analysts’ estimate. Dollar Tree lowered its fiscal 2019 EPS guidance to reflect higher freight costs and store closure costs.

To learn more about Dollar Tree and Dollar General’s first-quarter performance, read Dollar General or Dollar Tree: Who Fared Better in Q1.

As of June 10, Dollar Tree stock has risen 14.9% on a year-to-date basis compared to a 24.9% rise in Dollar General stock and a 15.2% rise in the S&P 500 Index.


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