Consumers are navigating a landscape of shifting retail dynamics as discount giants face mounting pressure to deliver consistent growth. At its Investor Day, Dollar Tree Inc.
BofA analyst Robert Ohmes maintained an Underperform rating and price target of $75.
The Dollar Tree Thesis: The company reaffirmed its fiscal 2026 guidance for comps of 4%-6% and adjusted earnings of $5.32-$5.72 per share, Ohmes said in the note.
Dollar Tree indicated that its comps in the third quarter are tracking at 3.8%, significantly lower than the previous quarter's 6.5%, he stated. The analyst added, however, that the final weeks of the quarter "could come in stronger given higher Halloween/seasonal penetration."
Ohmes expressed concern around expense pressures on Dollar Tree from "increased store complexity and potential competitive response risks," as the company expands into higher price point consumable/discretionary items.
DLTR Price Action: Dollar shares were down 2.69% at $93.39 at the time of publication on Thursday. The stock is trading within its 52-week range of $60.49 to $118.06, reflecting a significant pullback from its recent highs.
Despite this decline, Dollar Tree has shown resilience with a year-to-date performance of 22.1%, indicating strong underlying demand and investor interest over the past months.
From a technical perspective, the stock is currently trading 8.2% below its 50-day moving average of $101.76, which suggests a bearish short-term trend. Conversely, it is positioned 5.5% above its 200-day moving average of $88.54, indicating a longer-term bullish sentiment.
This divergence between the short-term and long-term moving averages could signal potential volatility as the stock seeks to find its footing.
