Wedbush Raises Price Target on Family Dollar (FDO), Solid Q4 Results & 2012 Outlook

Wedbush is maintaining its Neutral rating on shares of Family Dollar Stores Inc. (NYSE: FDO) and is raising its price target from $50 to $55 following its Q4 results.

The company reported its Q4 quarter results with EPS of $0.66 and $2.13 billion in sales, inline with guidance and the consensus. Family Dollar also released its initatial Q1 and 2012 guidance inline with the consensus. FDO's outlook calls for EPS of $3.50-$3.75 on 4-6 percent comps. Q1 guidance of $0.65-$0.73 in earnings and 4-6 percent comps was ahead of the firms previous estimates.

Over 2012, the company announced plans to open between 450 and 500 new stores while repurchasing $250 million in shares.

To go inline with market trends and the company's guidance, Wedbush is raising its 2012 EPS estimate from $3.58 to $3.70 and is initiating its 2013 at $4.18.

An analyst at Wedbush comments, "Ongoing mix shift towards consumables continues to pressure gross margin. Given these constraints, we expect upside to guidance is limited. Therefore, given that the stock is trading at about 15x our 2012 EPS forecast, which is in line with the company’s median 15x 5-year P/E, we believe there are few catalysts to drive the stock significantly higher from current levels."

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 $53.31 yesterday.

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