UBS Reiterates Buy Rating on Dollar Tree (DLTR)

UBS analyst Michael Lasser reiterated a Buy rating and $108.00 price target on Dollar Tree (NASDAQ: DLTR).

The analyst commented, "In a nutshell, there was a lot of confusion with DLTR's guidance. This represents a significant opportunity, in our view. The confusion was due in part to: DLTR reiterated most of the components of its FY guidance, but it noted that it's going to experience 45-50% decline in 2Q earnings. This is due in part to $70mm of incremental costs from tariffs that will impact the GM and $40mm of incremental costs in the SG&A from added labor (with little explanation). Plus, the company raised its full year gross margin outlook to an expected 50-75 bps increase. This implied more than 100bps of expansion in 2H given what it achieved in 1Q and was guiding to for 2Q. The impression was that this left too much of a burden to achieve, potentially creating downside risk in the back half."

For an analyst ratings summary and ratings history on Dollar Tree click here. For more ratings news on Dollar Tree click here.

Shares of Dollar Tree closed at $88.62 yesterday.

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