Dollar Store Headwinds Not Uprooting Deutsche From Dollar Tree Buy Rating

Even with strong headwinds for the discount retail sector, Deutsche Bank Markets Research analyst Paul Trussell maintains a Buy rating and price target of $96 for Dollar Tree, Inc. DLTR ahead of its Q3 earnings report on November 22.

The company faces competitive pricing challenges across the market, decreased SNAP benefits and overall deflation, but according to the analyst, these are considered in the current estimates.

Headwinds Not Deflating Optimism

While some on the Street are cautious with the headwinds, three key factors are keeping Trussell optimistic:

1. Family Dollar Stores, Inc. FDO's slightly positive comparables.
2. Family Dollar’s progress toward its 7.5 percent EBIT margin target.
3. Dollar Tree’s comp stabilization and margin expansion.

At time of writing, shares of Dollar Tree were trading up 0.24 percent at $81.85.