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Dollar Tree Stock Upgraded by Analysts on Earnings Outlook Despite Traffic Concerns
Summary
Discount retailer Dollar Tree received analyst upgrades from Raymond James and Goldman Sachs, who pointed to a stronger earnings outlook, though concerns about store traffic persist.
Dollar Tree (DLTR) received a pair of analyst upgrades on Wednesday, with financial firms citing potential for earnings growth even as the discount retailer continues to face challenges with customer traffic.
Raymond James upgraded the company to "Outperform" from "Market Perform" and set a $140 price target. The firm suggested that Dollar Tree's fiscal 2026 guidance may be conservative, not fully accounting for potential benefits from tariff refunds, lower fuel costs, or additional share repurchases. Raymond James noted that the company has already received $110 million in tariff refunds and could see several hundred million more, which could be reinvested to drive sales.
Separately, Goldman Sachs upgraded Dollar Tree to "Neutral" from "Sell," raising its price target to $125 from $105. The bank pointed to improving consumer perceptions of the retailer's pricing and value. However, Goldman Sachs remained cautious, highlighting that store traffic trends are still negative and that competition from rivals like Walmart and Dollar General remains intense.
AdBoth firms acknowledged Dollar Tree's strong cash position and a recent $500 million share repurchase as positive factors. While the upgrades signal growing optimism about the company's operational execution and financial prospects, the analysts differ on how much of the anticipated recovery is already reflected in the current stock price.