Analyst Kelly Bania of BMO Capital maintained a Hold rating on Dollar Tree (DLTR – Research Report), with a price target of $70.00.
Kelly Bania has given his Hold rating due to a combination of factors impacting Dollar Tree’s current and future performance. The sale of Family Dollar, although at a low price, is seen as a positive step that allows Dollar Tree to focus more on its core operations and reduces capital expenditure burdens. However, the company faces challenges such as reliance on pricing strategies to counteract uncertain tariff conditions and a lack of clarity on shrink and mix-shift details.
Additionally, Dollar Tree’s exposure to tariffs, particularly those related to imports from China, remains a concern, despite efforts to mitigate these costs. The company’s guidance suggests a reduction in China import exposure, but the reliability and quality of the new supply chain remain uncertain. These factors, combined with the digital challenges and the push towards higher price points, contribute to a balanced risk-reward scenario, justifying the Hold rating.
In another report released today, Morgan Stanley also maintained a Hold rating on the stock with a $80.00 price target.