UBS Reiterates Buy on Dollar Tree (DLTR) Following 3Q - PT to $100
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UBS reiterated a Buy rating on Dollar Tree (NASDAQ: DLTR), and raised the price target to $100.00 (from $90.00), following the company's 3Q earnings report. Core DLTR reported better than anticipated sales & OM in 3Q showing it is on steady ground. Its 3Q comp of 1.7% exceeded the consensus estimate and included 80 bps of headwind from rebannering cannibalization.
Analyst Michael Lasser commented, "We think 3Q helped DLTR reinvigorate its investment case DLTR's 3Q results eased a number of fears. First, we believe it demonstrated that the Dollar Store channel can hold its own with WMT price & labor investments, food deflation, & a reduction of SNAP benefits. Second, it served as a reminder of the idiosyncratic opportunity DLTR has ahead of itself. Core DLTR generated accelerating comp & EBIT growth. Further, FDO produced sales that were about as expected in a tough environment, putting the enterprise further down its path to realize what we believe to be well over the $300 mm in synergies that it has guided to previously. We believe this creates a compelling combination that should produce 20%+ EPS growth over the next few years. Yet, the stock still trades at ~19x ’17 EPS, an undemanding valuation in our view."
Shares of Dollar Tree closed at $88.68 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst PT Change
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