Deutsche Bank Maintains a 'Buy' on Family Dollar Stores; Pricing Analysis Shows How FDO Deals with Inflation

Deutsche Bank maintains a 'Buy' on Family Dollar Stores Inc. (NYSE: FDO), PT $60.

Deutsche analyst says, "We conducted a pricing study between Family Dollar and Dollar General to gauge potential sales and margin pressures on FDO as a result of DG’s sharper pricing strategy and believe that FDO is effectively using zone pricing techniques to balance sales and margin growth in an inflationary environment. As a result, we are comfortable that FDO will be able to generate a solid comp without much gross margin pressure this quarter and we maintain our Buy rating."

"For the year, we expect FDO to maintain its plan of $3.13-$3.23 on 5%-7% comps. Our estimate is $3.20 on 5.7% comps while consensus sis $3.15 on 5.3% comps."

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 $53.34 yesterday.

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