Deutsche Bank Starts Family Dollar Stores Inc. (FDO) at Hold; Store/Remodel Investments Raise Fixed Cost Hurdle Rate

Deutsche Bank initiates coverage on Family Dollar Stores Inc. (NYSE: FDO) with a Hold. PT $53.00.

Deutsche analyst says, "On paper, the playbook has been written for improved SPSF, which should allow for EBIT margins to march higher towards the 10% level. Peer Dollar General (NYSE: DG) has taught us this plan is feasible, but execution has (at times) remained elusive at FDO. At the same time, big investments in store growth/remodels will raise the comp hurdle bar, making 6%+ comps a prerequisite for SG&A leverage. All told, we'll await a better entry point to get involved."

For more ratings news on Family Dollar Stores Inc. click here and for the rating history of Family Dollar Stores Inc. click here.

Shares of Family Dollar Stores Inc. closed at $51.97 yesterday.

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