Dollar Tree Is Our Favorite Stock In Our Discount Retailer Universe, Says Wedbush
In a research report released today, Wedbush analyst Joan Storms maintained an Outperform rating on Dollar Tree (NASDAQ:DLTR) with a $63 price target. The report comes ahead of the company’s second-quarter results, which will be reported before market open on Thursday, August 21.
Storms noted, “We believe the upcoming expected acquisition of Family Dollar further enhances the growth strategy. Dollar Tree is our favorite stock in our discount retailer universe due to its positioning as the only $1-price-point retailer, more economically resilient customer base, greater exposure to more discretionary merchandise, and management’s history of strong execution and shareholder returns. Despite significant increases in store productivity, we see more opportunities through sophisticated real estate location programs, store relocations, the continued rollout of coolers, and other ongoing strategies to improve the merchandise assortment, including new impulse item merchandising. Recent growth has been trending lower as a result of major investments in stores,merchandise, and technology, but we believe this sets the company up nicely for improved growth in 2014 and beyond. The company faces easier comparisons going forward and, despite headwinds, top line should be helped by the accelerated rollout of coolers, strength of newer discretionary merchandise, improving outlook for Deal$, and domestic and Canadian expansion.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Joan Storms has a total average return of -0.8% and a 50.0% success rate. Storms has a 11.5% average return when recommending DLTR, and is ranked #2653 out of 3243 analysts.