Discount retailer Dollar Tree (DLTR) is scheduled to announce its results for the second quarter of Fiscal 2025 before the market opens on Wednesday, September 3. DLTR stock has rallied 46% year-to-date, as investors are optimistic about the company’s growth potential following the divestiture of the Family Dollar business, which had been weighing on its overall performance. Meanwhile, Wall Street expects Dollar Tree to report earnings per share (EPS) of $0.42 for Q2 FY25, reflecting a 37% year-over-year decline.
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Further, revenue is expected to fall by more than 39% to $4.48 billion, reflecting the divestiture of the Family Dollar business. Investors will look forward to updates from management on the retailer’s growth strategy and the impact of tariffs.
Analysts’ Views Ahead of Dollar Tree’s Q2 Earnings
Heading into Q2 results, Telsey Advisory analyst Joseph Feldman upgraded Dollar Tree stock to Buy from Hold and increased his price target to $130 from $100. The 5-star analyst cited the introduction of multi-price point products by Dollar Tree as the reason for his bullish stance. He is “encouraged” by the early results of this initiative. Feldman also highlighted the updated multi-price 3.0 store format.
Feldman expects the multi-price point initiative to drive multi-year growth in Dollar Tree’s sales and profits. He also expects these initiatives to help Dollar Tree gain market share and effectively manage rising costs and tariffs.
Meanwhile, UBS analyst Michael Lasser increased his price target for Dollar Tree stock to $135 from $127 and reiterated a Buy rating. The 5-star analyst believes that Dollar Tree remains one of the best ideas in the hardline, broadline, and food retail space.
Lasser contended that while investor sentiment has improved in recent quarters, the near- and long-term opportunities are not fully priced into DLTR stock. The analyst expects upward estimate revisions and multiple expansion to drive Dollar Tree stock higher in the near term, as the discount retailer sees accelerating comparable sales momentum.
AI Analyst Is Cautious on Dollar Tree Stock Ahead of Q2 Print
Interestingly, TipRanks’ AI Analyst has assigned a Neutral rating to Dollar Tree stock, with a price target of $110, indicating that the stock is fully valued at its current levels. TipRanks’ AI analysis reflects mixed financial performance with challenges in profitability and valuation. Meanwhile, positive technical momentum and strategic corporate actions, including share buybacks and the sale of the Family Dollar banner, provide a supportive backdrop.
Here’s What Options Traders Anticipate Ahead of DLTR’s Q2 Earnings
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you.
Indeed, it currently indicates that options traders expect a 7.9% move in either direction in DLTR stock in reaction to Q2 FY25 results.
Is DLTR Stock a Buy, Sell, or Hold?
Overall, Wall Street has a Moderate Buy consensus rating on Dollar Tree stock based on nine Buys, 10 Holds, and one Sell recommendation. The average DLTR stock price target of $113.67 indicates 4.1% upside potential from current levels.
