Barclays Raises Numbers on Dollar Tree (DLTR) After Good Q1; Shares Look Fairly Valued

May 18, 2012 2:19 PM EDT
Get Alerts DLTR Hot Sheet
Price: $75.60 -1.25%

Rating Summary:
    18 Buy, 15 Hold, 2 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 22 | Down: 17 | New: 13
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Barclays maintains an 'Equalweight' on Dollar Tree (NASDAQ: DLTR) price target raised from $84 to $96.

Analyst, Meredith Adler, said, "Once again, DLTR reported good numbers, with 1Q12 comp of +5.6% and EPS of $1.00 vs. 4.2% and $0.98 for consensus. EPS grew 22% this quarter, after being up 25% in 2011 and 36% in 2010...We are maintaining our 2Q12 EPS of $0.96 and raising our FY12 and FY13 EPS by $0.03 each (to $4.97/$5.80, respectively) to reflect the upside relative to our 1Q12 forecast. Guidance is for FY12 EPS of $4.74-$4.94 without any additional buybacks."

Adler maintains an Equalweight rating, saying the company seems stuck between a rock and hard place. She feels there isn't much more the company can do better, but certain parts of the company's business model may in fact constrain growth. Some of her points include: 1) fixed price points; 2) DLTR needs strip mall with heavy traffic, usually with a supermarket as an anchor, but then selling food isn't usually permitted. On a positive note, the DLTR is cash flow strong, using money to buyback stock or pay dividend can offset those previous constraints. All in, Alder feels shares are fairly valued.

For an analyst ratings summary and ratings history on Dollar Tree click here. For more ratings news on Dollar Tree click here.

Shares of Dollar Tree closed at $95.13 yesterday.

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