Financial Insights That Matter
April 7 – Shares of Dollar Tree (NASDAQ:DLTR) jumped around 6% on Monday after the opening bell as Citi (NYSE:C) upgraded the stock from “Neutral” to “Buy”, pointing to the company’s ability to raise prices amid rising tariffs. Analyst Paul Lejuez believes Dollar Tree can increase its prices from $1.25 to $1.75 without much pushback, calling the move inevitable in today’s market. With about half of its products impacted by higher tariffs, Dollar Tree’s strong value positioning puts it in a good spot as overall retail prices rise.
Citi also boosted its price target for the stock, going from $76 to $103.
Lejuez backed up his upgrade by pointing to Dollar Tree’s past performance. When the company first moved away from the $1 price point, it saw solid sales growth, 9% in 2022 and 6% in 2023. The company also improved its EBIT margin to 13.7% in 2023, up from previous years. Despite a recent 10% drop in the stock, Dollar Tree remains financially stable, with strong cash flow to cover its costs.
This article first appeared on GuruFocus.
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