Yahoo Finance Analysts Have Been Trimming Their Dollar Tree, Inc. (NASDAQ:DLTR) Price Target After Its Latest Report
Dollar Tree, Inc. (NASDAQ:DLTR) shareholders are probably feeling a little disappointed, since its shares fell 5.6% to US$111 in the week after its latest first-quarter results. Revenues of US$7.6b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$1.38, missing estimates by 3.7%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
See our latest analysis for Dollar Tree
Taking into account the latest results, Dollar Tree's 24 analysts currently expect revenues in 2025 to be US$31.3b, approximately in line with the last 12 months. Dollar Tree is also expected to turn profitable, with statutory earnings of US$6.72 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$31.4b and earnings per share (EPS) of US$6.95 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.
The average price target fell 5.8% to US$140, with reduced earnings forecasts clearly tied to a lower valuation estimate. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Dollar Tree at US$170 per share, while the most bearish prices it at US$115. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Dollar Tree's revenue growth is expected to slow, with the forecast 1.5% annualised growth rate until the end of 2025 being well below the historical 5.9% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.7% per year. Factoring in the forecast slowdown in growth, it seems obvious that Dollar Tree is also expected to grow slower than other industry participants.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Dollar Tree. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Dollar Tree's revenue is expected to perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Dollar Tree going out to 2027, and you can see them free on our platform here..
You can also see whether Dollar Tree is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
