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Dollar Tree (DLTR) Dips More Than Broader Markets: What You Should Know

·3 min read

In the latest trading session, Dollar Tree (DLTR) closed at $164.75, marking a -1.16% move from the previous day. This change lagged the S&P 500's 0.67% loss on the day. Meanwhile, the Dow lost 1.23%, and the Nasdaq, a tech-heavy index, lost 0.05%.

Coming into today, shares of the discount retailer had gained 6.67% in the past month. In that same time, the Retail-Wholesale sector gained 9.5%, while the S&P 500 gained 7.79%.

Investors will be hoping for strength from Dollar Tree as it approaches its next earnings release. On that day, Dollar Tree is projected to report earnings of $1.57 per share, which would represent year-over-year growth of 27.64%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.77 billion, up 6.8% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $8.15 per share and revenue of $28.08 billion. These totals would mark changes of +40.52% and +6.69%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Dollar Tree. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Dollar Tree is currently sporting a Zacks Rank of #1 (Strong Buy).

Digging into valuation, Dollar Tree currently has a Forward P/E ratio of 20.46. This represents a no noticeable deviation compared to its industry's average Forward P/E of 20.46.

Also, we should mention that DLTR has a PEG ratio of 1.32. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Retail - Discount Stores stocks are, on average, holding a PEG ratio of 1.87 based on yesterday's closing prices.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 144, which puts it in the bottom 43% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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