KeyBanc Starts Dollar Tree (DLTR) at Overweight
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KeyBanc initiates coverage on Dollar Tree (NASDAQ: DLTR) with a Overweight rating and a price target of $90. Analyst Bradley B. Thomas sees potential for as much as $8 in EPS power long-term.
"DLTR is a compelling multi-faceted story, supported by a strong execution at legacy DLTR, as well as a synergy and turnaround story at legacy FDO, acquired in 2015. While DLTR faces near-term headwinds (food deflation, SNAP restrictions, WMT price investment), we believe the recent pullback in shares takes these risks into consideration, and we remain positive on the 2-3-year opportunity ahead as DLTR leverages its ownership of FDO," said Thomas.
The analyst added, "Dollar Tree, which acquired Family Dollar in 2015, boasts a strong operating track record, including positive same-store sales, for over a decade. Continued growth at core Dollar Tree, coupled with potential FDO synergy upside and a turnaround at FDO could drive $8 per share in earnings power in five years."
Shares of Dollar Tree closed at $77.24 yesterday.
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