Dollar Tree is a wise bet for investors both near- and long-term, according to Goldman Sachs, given that shares of the discount retailer have tumbled 31 percent since June.
THE OPINION: Analyst Stephen Grambling argues that the company's third-quarter results will likely fall in line with market expectations when it reports in mid-November. And while he anticipates the company will issue conservative guidance for fourth-quarter sales trends, he expects the company will actually benefit from strong holiday sales and a favorable comparison to the same period last year, when severe weather closed some stores.
Dollar Tree also has a long history of delivering consistent growth regardless of the broader economy, Grambling said in a research note Tuesday. He feels the company still has room to grow and the double-digit decline in its stock since June, he sees it as an attractive purchase.
Grambling upgraded his rating on the company's shares to "buy" from "neutral." He has a $48 price target on the company's stock.
THE STOCK: Dollar Tree Stores Inc. rose nearly 2 percent, or 61 cents, to $39.80 by early afternoon Wednesday.
The company's stock had been climbing steadily from the end of 2011, jumping nearly 50 percent from November of 2011 to June of 2012. Then its shares began to tumble as analysts questioned how long that run for both dollar tree and the broader extreme discount retailer segment could continue.