Analysts Have Been Trimming Their Dollar Tree, Inc. (NASDAQ:DLTR) Price Target After Its Latest Report

Last week, you might have seen that Dollar Tree, Inc. (NASDAQ:DLTR) released its first-quarter result to the market. The early response was not positive, with shares down 5.6% to US$111 in the past week. Revenues of US$7.6b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$1.38, missing estimates by 3.7%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Dollar Tree

Following last week's earnings report, Dollar Tree's 24 analysts are forecasting 2025 revenues to be US$31.3b, approximately in line with the last 12 months. Dollar Tree is also expected to turn profitable, with statutory earnings of US$6.72 per share. Before this earnings report, the analysts had been forecasting revenues of US$31.4b and earnings per share (EPS) of US$6.95 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

It might be a surprise to learn that the consensus price target fell 5.8% to US$140, with the analysts clearly linking lower forecast earnings to the performance of the stock price. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Dollar Tree analyst has a price target of US$170 per share, while the most pessimistic values it at US$115. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Dollar Tree's revenue growth is expected to slow, with the forecast 1.5% annualised growth rate until the end of 2025 being well below the historical 5.9% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 4.7% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Dollar Tree.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Dollar Tree's revenue is expected to perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Dollar Tree. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Dollar Tree going out to 2027, and you can see them free on our platform here..

You can also see whether Dollar Tree is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.