Market Overview

UPDATE: J.P. Morgan Raises PT on Dollar Tree on Hard-To-Beat Profile

Share:
Related DLTR
Benzinga's Top Upgrades
Dollar General Seen As Winner From Wal-Mart Store Closures

In a report published Tuesday, J.P. Morgan analyst Matthew R. Boss reiterated an Overweight rating on Dollar Tree (NASDAQ: DLTR), and raised the price target from $45.00 to $52.00.

In the report, Boss noted, “DLTR remains our low-end 'horseman' with a profile that is hard to beat in our view: (1) High-single-digit sq ft growth (~9 years to US saturation), (2) 3.0% underlying core comp build, (3) gross margin stability w/ ~50% of goods manufactured direct (i.e. private label), (4) 1-2% SG&A fixed cost hurdle, and (5) under-leveraged balance sheet (~2.6x debt/Ebitdar). While the low-end macro backdrop remains choppy, we think organic traffic (~80% of comp trailing 8 Q's) is the key, with average ticket the next leg given DLTR's higher income “core” household income (~$60K). Longer-term, we see incremental global opportunities for the Tree with Canada reaching an inflection (140 stores today with 1,000 stores goal/infrastructure built) and Dollarama moving into Latin America (first dollar concept entrant / similar operating model).”

Dollar Tree closed on Monday at $48.70.

Latest Ratings for DLTR

DateFirmActionFromTo
Feb 2016Telsey Advisory GroupUpgradesMarket PerformOutperform
Jan 2016Cleveland ResearchInitiates Coverage onBuy
Dec 2015RBC CapitalUpgradesOutperformTop Pick

View More Analyst Ratings for DLTR
View the Latest Analyst Ratings

Posted-In: J.P. MorganAnalyst Color Price Target Analyst Ratings

 

Related Articles (DLTR)

Get Benzinga's Newsletters