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Deutsche Bank Maintains a 'Hold' Dollar Tree (DLTR); Raises Estimates & PT

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November 25, 2009 9:31 AM EST

Deutsche Bank maintains a 'Hold' rating Dollar Tree (Nasdaq: DLTR), price target increased from $52 to $57.

Deutsche analyst says,"DLTR had already reported 3Q09 sales of 6.5%, which were ahead of consensus. EPS also beat plan, coming it at $0.76 compared to consensus of $0.68. The beat was on both gross margin and expenses coming in better than plan. In fact, the 240 bps margin increase was the best in seven years. We balance the near term strength with concerns that continued improvement at the current pace may be > difficult, and maintain a Hold rating...On the strength of 3Q09 and a good start to 4Q09, DLTR raised its guidance again. 4Q09 EPS is guided to $1.30-$1.39 compared to consensus of $1.35. The plan is predicated on a comp in the low to mid single digit range, which we view as very conservative as comparisons are easy this quarter after 4Q08 was weather impacted. Margins should be up once again, but to a smaller degree as some benefits from fuel wear off...We are increasing our 2009 and 2010 EPS estimates to $3.42 and $3.97 from $3.20 and $3.53, and introducing 2011 of $4.45."

To see all the upgrades/downgrades on shares of DLTR, visit our Analyst Ratings page.

Dollar Tree, Inc., through its subsidiaries, operates discount variety stores in the United States. Its stores offer merchandise at the fixed price of $1.00.