Nomura Securities Downgrades Dollar Tree (DLTR) to Neutral; Valuation Call

July 2, 2012 8:35 AM EDT
Get Alerts DLTR Hot Sheet
Price: $77.31 -2.77%

Rating Summary:
    18 Buy, 15 Hold, 2 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 13 | Down: 22 | New: 54
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Nomura Securities downgraded Dollar Tree (NASDAQ: DLTR) from Buy to Neutral with a price target of $54.00.

Analyst, Aram Rubinson, said, "The reason for the change is that DLTR shares have reached our $54 price target. Our estimates and target are both unchanged. While the shares are likely to continue to perform well, it is harder to justify a higher target at present. We model comps to grow 5% per annum in ‘12 and ‘13. We model a 13.2% EBIT margin versus a prior peak of 13.1% seen in 1999. At 10x our 2013 EBITDA, DLTR shares are trading at an appropriate level, in our view. In addition to terrific merchandising and 6-7% store growth, DLTR offers investors a strong balance sheet and stable results that seem to recur in all kinds of macro environments."

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 $53.80 yesterday.

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