Market Overview

Family Dollar, Dollar Tree 'Clearly' Have 'A Lot Of Work Ahead'

Related FDO
Dollar Store Headwinds Not Uprooting Deutsche From Dollar Tree Buy Rating
Bull And Bear Cases For Dollar Tree Ahead Of Q3 Earnings
Related DLTR
3 Key Reasons Why Dollar Tree Stock Crashed After Earnings
Payroll Data Up Next, But M&A, ECB And Tariffs All In Focus Ahead Of Jobs Report
Weekly Top Insider Buys Highlight for the Week of March –6 (GuruFocus)

Family Dollar Stores, Inc. (NYSE: FDO) reported earnings Wednesday morning. Additionally, Dollar Tree, Inc. (NASDAQ: DLTR) also provided an update on the merger.

Analysts at FBR & Co. said in reaction that Dollar Tree "clearly has a lot of work in front of it," noting that the number of stores that the FTC would like to see divested is 340, up from 300 prior. FBR opined that the reason that the FTC was requiring more stores to be sold is in expectation that some of those stores would fail under new management. Notably, FBR said that it does not expect Dollar General Corp. (NYSE: DG) to be a major buyer of these 340 stores.

However, beyond the divestiture, FBR believes that Family Dollar's challenges are "far more structural" than the Street is willing to acknowledge. While Dollar Tree will eventually be able to "fix" Family Dollar, in FBR's view, the integration will be "vastly more troubled and time consuming" than many believe.

FBR has a Market Perform rating on Family Dollar.

Shares of Family Dollar recently traded at $79.68, down 0.36 percent.

Latest Ratings for FDO

Apr 2015JefferiesMaintainsHold
Jan 2015BarclaysMaintainsEqual-Weight
Jan 2015JefferiesDowngradesBuyHold

View More Analyst Ratings for FDO
View the Latest Analyst Ratings

Posted-In: dollar general Dollar Tree family dollar FBR & Co.Analyst Color Analyst Ratings


Related Articles (DLTR + DG)

View Comments and Join the Discussion!