On Wednesday, Dollar Tree (NASDAQ:DLTR) saw its price target increased by Jefferies from $70.00 to $75.00, while the firm maintained a Hold rating on the stock. This adjustment comes in the wake of Dollar Tree's third-quarter earnings surpassing expectations, anchored by a robust 1.9% comparable-store sales growth for Family Dollar (FD), which outperformed the consensus estimate of 0.7%.
The positive performance was attributed to both discretionary items and consumables. According to InvestingPro data, analyst price targets for Dollar Tree currently range from $64 to $120, reflecting mixed sentiment about the $15.88 billion retailer's prospects.
The company has also refined its full-year 2024 forecasts, tightening both top-line and bottom-line guidance, and provided a fourth-quarter outlook that aligns with current market projections. In response, Jefferies has slightly modified its estimates and price target to reflect these developments.
Despite the positive quarterly results, the firm remains cautious due to ongoing uncertainties related to management changes, potential tariffs, and the structure of Family Dollar. InvestingPro analysis indicates the stock is currently undervalued, with management actively buying back shares - one of several key insights available in the comprehensive Pro Research Report covering Dollar Tree.
Dollar Tree's recent financial performance has demonstrated resilience, with revenue growing 5.65% over the last twelve months, despite the stock declining nearly 40% over the past six months. The adjustment in guidance suggests a focused approach to navigating the upcoming fiscal period, with analysts predicting a return to profitability this year, according to InvestingPro data.
The retailer, known for its variety of items priced at $1 or more, has been working on streamlining its business model and improving its store experience. These efforts seem to be yielding tangible results, as seen in the latest earnings report.
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