On Tuesday, Citi reiterated its Buy rating on Dollar Tree (NASDAQ:DLTR) with a consistent price target of $163.00. The firm's analysis suggests a first-quarter earnings per share (EPS) of $1.39, slightly below the consensus of $1.43, based on an estimated total company comparable sales increase of 2.1%, which is also just shy of the consensus forecast of 2.6%. For Dollar Tree specifically, comps are expected to rise by 4.0%, compared to a consensus of 5.0%, while Family Dollar's (FD) comps are projected to remain flat, in contrast to a consensus estimate of a 0.2% increase.
Citi anticipates that management will reaffirm its fiscal year 2024 guidance, projecting comparable sales growth in the low single to mid-single digits and an EPS range of $6.70 to $7.30. For the second quarter, the firm expects management to guide for a low single to mid-single digit increase in Dollar Tree comps, which is below the consensus of 4.5%, and for Family Dollar's comps to remain flat, compared to a consensus of 0.9%. The EPS for the second quarter is projected to be between $1.10 and $1.25, versus the consensus estimate of $1.20.
The primary focus for the first quarter will likely be on the progress of Family Dollar's turnaround and insights gained from the closure of certain FD stores during the quarter. It is noteworthy that management did not reaffirm their goal of achieving $10 in EPS by fiscal year 2026, prompting additional attention on any updates or details regarding management's long-term outlook.
InvestingPro Insights
As Dollar Tree (NASDAQ:DLTR) continues to navigate through its financial year, real-time data from InvestingPro provides a deeper look into the company's market performance and potential. The company's market capitalization stands strong at $24.76 billion, indicating its significant presence in the retail sector. Despite recent challenges, analysts remain optimistic about Dollar Tree's growth, with net income expected to rise this year, according to InvestingPro Tips. This aligns with Citi's anticipation of management reaffirming fiscal year 2024 guidance with a promising EPS range.
InvestingPro Data also reveals a P/E Ratio (Adjusted) for the last twelve months as of Q4 2024 at 22.71, suggesting that the company's earnings might justify its stock price in the eyes of investors. Furthermore, the stock's Price / Book ratio of 3.39 during the same period can offer insights into valuation from an asset perspective. Notably, the Revenue Growth for the last twelve months as of Q4 2024 was recorded at 8.02%, showcasing the company's ability to increase its sales and potentially its market share.
For investors considering the stock's current status, an InvestingPro Tip points out that the Relative Strength Index (RSI) suggests the stock is in oversold territory, which may signal a potential buying opportunity for those looking at technical indicators. Additionally, Dollar Tree's liquid assets exceed its short-term obligations, providing a cushion for operational needs.
To explore more in-depth analysis and additional InvestingPro Tips, such as the company's ability to cover interest payments with its cash flows and predictions on profitability, visit https://www.investing.com/pro/DLTR. There are 7 more InvestingPro Tips available for Dollar Tree, offering a comprehensive understanding of the company's financial health. Remember to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription for even more expert insights.
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