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A Look At Dollar Tree (DLTR) Valuation After Turnaround Moves And Buyback Announcement

Simply Wall St · 4d ago

What sparked the latest interest in Dollar Tree?

Dollar Tree (DLTR) is back in focus after its shift to a multi price model, sale of the Family Dollar business and a US$2.5b share buyback, alongside supportive macro policy tailwinds.

See our latest analysis for Dollar Tree.

The recent shift to a multi price model, the sale of Family Dollar and the US$2.5b buyback have coincided with a strong 90 day share price return of 52.32% and a 1 year total shareholder return of 78.35%. This suggests that momentum has been building around Dollar Tree’s turnaround and perceived risk profile.

If Dollar Tree’s move is on your radar, it could be a good moment to widen your search and check out fast growing stocks with high insider ownership.

With the stock up sharply and Dollar Tree trading around US$133.78, but sitting above both the average analyst price target and an intrinsic value estimate, you have to ask: is there still upside here, or is the market already pricing in future growth?

Most Popular Narrative: 13.6% Overvalued

With Dollar Tree closing at US$133.78 against a most-followed fair value estimate of US$117.78, the narrative leans toward a rich valuation and relies heavily on specific growth and margin assumptions.

The analysts have a consensus price target of $112.304 for Dollar Tree based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $140.0, and the most bearish reporting a price target of just $75.0.

Read the complete narrative.

Curious what earnings profile, margin lift and future P/E multiple are built into that fair value, and how they compare to the industry norm? The full narrative spells it out.

Result: Fair Value of $117.78 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, several pressure points could still upset this story, including cost inflation tied to tariffs and the risk that price hikes weaken Dollar Tree’s value-focused brand.

Find out about the key risks to this Dollar Tree narrative.

Build Your Own Dollar Tree Narrative

If the numbers here do not quite line up with your view or you prefer to work from the raw data, you can build a custom version in minutes with Do it your way.

A great starting point for your Dollar Tree research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

If Dollar Tree has sparked your interest, do not stop here. The real edge comes from comparing it with a wider set of focused stock ideas.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.