Dollar Tree, the Consumer Defensive sector company, was revisited by a Wall Street analyst yesterday. Analyst Kelly Bania from BMO Capital maintained a Hold rating on the stock and has a $110.00 price target.
Claim 50% Off TipRanks Premium and Invest with Confidence
- Unlock hedge-fund level data and powerful investing tools designed to help you make smarter, sharper decisions
- Stay ahead of the market with the latest news and analysis so your portfolio is always positioned for maximum potential
Kelly Bania has given her Hold rating due to a combination of factors impacting Dollar Tree’s current and future performance. One of the primary concerns is the company’s reliance on price increases to drive comparable sales, which poses risks, especially in the absence of significant digital growth. This is particularly important as Dollar Tree aims to attract higher-income consumers over time. Additionally, while the gross margin percentage has shown strength, it is largely attributed to pricing strategies that exceed tariff costs, which may not be sustainable in the long term.
Another factor influencing the Hold rating is the observed deceleration in traffic and market share in the consumables segment, despite a growth in new, higher-income customers. The company’s management has outlined plans to stabilize gross margins in 2026, but uncertainties remain due to potential short-term fluctuations. Furthermore, the recent investment in labor hours is not expected to recur, adding another layer of complexity to future earnings projections. Overall, while there is potential for earnings growth through the recouping of one-time costs, the combination of these factors suggests a cautious approach, justifying the Hold rating.
In another report released today, Bernstein also maintained a Hold rating on the stock with a $109.00 price target.
DLTR’s price has also changed moderately for the past six months – from $96.720 to $112.920, which is a 16.75% increase.