Dollar Tree (DLTR) PT Raised to $109 at CFRA

CFRA analyst Arun Sundaram raised the price target on Dollar Tree (NASDAQ: DLTR) to $109.00 (from $104.00) while maintaining a Sell rating.

The analyst comments "We lift our 12-month target to $109 from $104, 16.5x our FY 25 (Jan.) EPS of $6.61 (up from $6.49; we initiate FY 26's at $7.42) vs. the 20x long-term average. FQ4 (Jan-Q) adj-EPS of $2.55 (+25.1% Y/Y) missed by $0.10, as comp sales growth of 3.0% fell short of the 3.3% consensus. Dollar Tree is performing well (+3.3% comp sales), which we expect to continue in FY 25 as DLTR expands its multi-price assortment (e.g., $3 and $5) to more stores. However, Family Dollar continues to underperform (-1.2% Y/Y comp sales). DLTR will close about 600 Family Dollar stores in F1H 2025 and will let another 370 stores close once leases expire. DLTR should see about a $0.15/share EPS benefit in FY 25 by closing these underperforming stores. In addition, additional freight savings should provide another $0.85-$0.90 EPS lift. However, FY 25 headwinds include increasing shrink, negative sales mix, and investments related to labor and store maintenance. We keep a Sell rating, as we see downside risk to DLTR's outlook."

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