Update shared on29 Jul 2025
Fair value Increased 12%Dollar Tree’s consensus price target was raised from $89.51 to $100.35 following strong Q1 comp sales growth, raised EPS guidance, and confident management commentary offsetting tariff and cost pressures with mitigation strategies.
Analyst Commentary
- Strong Q1 results with notable comp sales growth (~5%) driven by both store traffic and average ticket, providing evidence of successful merchandising and market share gains.
- Management raised EPS guidance, partly due to increased share repurchases and confidence in second-half profitability acceleration.
- Tariff headwinds and inflationary pressures remain a central concern, but mitigation strategies including pricing actions are expected to largely offset these impacts and keep fiscal year tariff effects neutral.
- Guidance for Q2 EPS was reduced due to temporary cost pressures (tariffs, labor), though analysts expect recovery in the back half of the year via operational strategies and cost control.
- Ongoing uncertainty persists regarding the longer-term effectiveness of tariff mitigation and overall execution, especially concerning merchandise quality and broader geopolitical risks.
What's in the News
- Increased equity buyback authorization to $2.5 billion.
- Amended by-laws to decrease the number of directors from 12 to 11.
- Provided Q2 2025 sales guidance at the higher end of 3% to 5% full-year outlook; reiterated full-year net sales guidance of $18.5–$19.1 billion.
- Repurchased 6.7 million shares for $500 million in the recent tranche; 21.6% of shares repurchased since 2013 under ongoing buyback.
- Surpassed 9,000 stores milestone and announced partnership with Arbor Day Foundation to plant 9,000 trees across North America.
Valuation Changes
Summary of Valuation Changes for Dollar Tree
- The Consensus Analyst Price Target has significantly risen from $89.51 to $100.35.
- The Future P/E for Dollar Tree remained effectively unchanged, moving only marginally from 16.80x to 17.09x.
- The Discount Rate for Dollar Tree remained effectively unchanged, moving only marginally from 7.00% to 6.90%.
Disclaimer
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