Best Retail Stocks To Buy In May

Key Insights

  • Traders stay focused on finding safe-haven plays as S&P 500 is testing yearly lows. 
  • Leading retail stocks received strong support this year. 
  • Analyst estimates for Walmart and Dollar Tree remain stable, making the stocks more attractive after the recent pullback. 

Some retail stocks continue to outperform the market. While S&P 500 is down by more than 15% year-to-date, Walmart and Dollar Tree gained ground in 2022 as traders viewed them as safe-haven plays.

Walmart

Analyst estimates for Walmart have been mostly stable in recent months. The company is expected to report earnings of $6.76 per share in the current fiscal year and $7.27 per share in the next year, so the stock is trading at roughly 20 forward P/E.

This is not cheap, but traders are ready to pay a premium for safety. Traders will soon have a chance to evaluate whether this premium is justified as Walmart will report its earnings on May 17.

Walmart is expected to report revenue of $138.8 billion and earnings of $1.47 per share. At this point, it looks that meeting this forecast would be sufficient enough to provide some support to the stock.

Dollar Tree

While analyst estimates for Walmart have stagnated in recent months, earnings estimates for Dollar Tree have moved a bit higher. The company is expected to report earnings of $8.00 per share in the current year and earnings of $8.97 per share in the next year, so the stock is trading at 18 forward P/E.

The recent earnings reports exceeded analyst estimates and provided significant support to Dollar Tree stock, which managed to gain strong upside momentum despite the weakness in the general market.

Dollar Tree has recently pulled back from highs, and this pullback could attract traders who are willing to increase their exposure to retail stocks.

For a look at all of today’s economic events, check out our economic calendar.

Best Retail Stocks To Buy Now

Key Insights

  • Investors are searching for safe-haven assets, and retail stocks may benefit from this trend. 
  • Some retail stocks, like Walmart and Dollar Tree, have already shown strong performance at the start of this year. 
  • Other retail stocks, like Home Depot, have suffered a pullback and returned to cheaper valuation levels. 

S&P 500 gained strong downside momentum in the recent trading sessions as the market reacted to hawkish comments from the Fed. Not surprisingly, investors are searching for safe-haven assets in the rising interest rate environment, and retail stocks have a good chance to benefit from this trend.

Walmart

Shares of Walmart had a strong start of this year and are up by about 10% year-to-date. Analyst estimates have improved in recent months, and the company is expected to report earnings of $6.76 per share in the current fiscal year.

In the next fiscal year, Walmart is projected to report earnings of $7.28 per share, so the stock is trading at 22 forward P/E. This is not cheap for a retailer, but investors are willing to pay a premium as the company has reported strong performance in recent quarters.

Dollar Tree

Dollar Tree developed strong upside momentum in 2022, but the stock is still valued at less than 19 forward P/E.

Shares of Dollar Tree have clearly benefited from the rush into potential safe-haven assets amid high inflation and rising yields, and they have a good chance to continue the current upside trend.

Home Depot

Unlike Walmart and Dollar Tree, shares of Home Depot had a challenging start of this year. Currently, Home Depot is down by more than 25% year-to-date.

Analyst estimates have moved a bit lower in recent months. The company is expected to report earnings of $16.1 per share in the current year and earnings of $17.31 per share in the next year, so the stock is trading at less than 18 forward P/E.

At such levels, the stock may attract more traders who are willing to initiate positions in this market segment.

For a look at all of today’s economic events, check out our economic calendar.

Best Stocks, Crypto, and ETFs to Watch – Visa, Dollar Tree, Bitcoin in Focus

Stocks

Visa Inc. (V) and Mastercard Inc. (MA) sold off last week, battered by projected revenue losses as a result of Russian sanctions. Both companies suspended operations in the rogue state over the weekend, setting the stage for additional losses when equity markets open on Monday. The stocks have lost more than 15% in recent weeks and are testing December 2021 lows that may not hold, given additional losses from reduced international travel, despite the pandemic’s retreat.

ABM Industries Inc. (ABM) is New York-based mid cap that provides cleaning and management services for large buildings in the United States and United Kingdom. That’s good news in a troubled world that’s punishing blue chips with exposure to mainland Europe and Russia. The stock broke out above 4-year resistance in early 2021 and posted an all-time high at 55.48 one year ago, ahead of a correction that bounced at breakout support in December. It’s now rallied into a trendline of lower highs, just in time for Thursday’s earnings report.

Dollar Tree Inc. (DLTR) incurred the wrath of the mainstream media after 400 stores were closed due to rat infestations. However, the stock has risen to the top of the Nasdaq-100 performance list at the same time, highlighting domestic exposure in a US economy that will suffer as a result of war in Europe. The stock rallied within a point of November 2021’s all-time high after a mixed earnings report on Wednesday and could breakout in coming weeks.

ETFs

iShares Dow Jones US Aerospace and Defensive Index ETF (ITA) broke out above an 8-month trendline of lower highs one week ago and reversed near the 2021 high at 113.13. A 19% surge in Lockheed Martin Corp (LMT) underpinned the uptick while Boeing Co.’s (BA) 18.53% weighting kept a lid on gains because it’s losing ground due to Russian exposure and the war’s economic impact. However, half of BA revenue is booked through defense applications that will generate windfall profits in coming years.

Crypto

Bitcoin (BTC) and other cryptocurrencies have disappointed long-side traders since the outbreak of the war, with a quick buying spike consumed by an immediate decline that now threatens to test and break January and February lows. The digital currency footprint hasn’t been heavy enough to mark an important funding source during the conflict while physical commodities, including gold and silver, have posted impressive gains.

Catch up on the latest price action with our new ETF performance breakdown.

 Disclosure: the author held Lockheed-Martin, Aerospace & Gold ETFs, Boeing, and Visa in family accounts at the time of publication. 

Preview: Will Dollar Tree Beat Estimates Again?

Dollar Tree, a leading operator of discount variety stores, is expected to deliver a year-over-year decline in earnings on Wednesday when it reports results for the holiday quarter ended January 2022.

The Chesapeake, Virginia-based company is expected to report earnings of $1.78 per share in the fourth quarter, down over 16% from $2.13 per share seen in the same period a year ago.

But the discount variety stores that sells items for $1 or less would post revenue growth of more than 5% to $7.13 billion. It is worth noting that the company has consistently beaten consensus earnings estimates in the last two years, at least.

“While no-moat Dollar Tree should benefit from a price increase at its namesake banner (to $1.25 from $1), with potential additional opportunity from activist investor Mantle Ridge’s involvement, we are unenthusiastic about the stock at its current trading price (around 20% above our revised $111 per share valuation, which is up from $106 mostly to reflect the time value of money),” noted Zain Akbari, Equity Analyst at Morningstar.

“Instead, investors looking to capitalize on discount retailers’ appeal in an inflationary economy should look to off-price chains.”

Dollar Tree stock traded over 1% higher at $143.91 on Tuesday. The stock rose nearly 2% so far this year after surging more than 30% in 2021.

Analyst Comments

“While supply chain disruptions and associated costs are top of mind given the unexpected magnitude of these costs in 2Q and ongoing impact in 3Q, we believe that Dollar Tree’s price-increase initiative will likely be a focal point for investors,” noted Randal J. Konik, equity analyst at Jefferies.

“More specifically, we think investors will look to better understand customer receptivity to these price increases, the degree to which these price increases can mitigate the aforementioned supply chain costs, and to what extent the company is utilizing higher price point items to diversify merchandising and sourcing.”

Dollar Tree Stock Price Forecast

Eleven analysts who offered stock ratings for Dollar Tree in the last three months forecast the average price in 12 months of $167.10 with a high forecast of $181.00 and a low forecast of $147.00.

The average price target represents a 16.85% change from the last price of $143.00. Of those 11 analysts, nine rated “Buy”, two rated “Hold”, while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $150 with a high of $220 under a bull scenario and $90 under the worst-case scenario. The investment bank gave an “Equal-weight” rating on the discount store operator’s stock.

“We are EW with a balanced (and uncertain) R/R skew. Earnings power looks relatively intact amidst COVID-19 disruption, with sales accelerations (especially at FDO) partially offset by incremental expenses and margin headwinds. Inconsistent results (especially at FDO) and limited EPS visibility keep us on the sidelines. Underlying Dollar Tree (DLTR) results should be steady while FDO sales can improve, driven by “H2” renovations,” noted Simeon Gutman, equity analyst at Morgan Stanley.

“Cost headwinds (freight, wages, shrink, and tariffs) may continue to weigh on profitability. Favourable skew of macro-outcomes: Dollar Tree (DLTR) benefits in a recession while gaining share in a low-growth environment. Store growth potential remains, but likely slower than prior history.”

Several analysts have also updated their stock outlook. UBS raised the target price to $175 from $170. Deutsche Bank lifted the price objective to $176 from $171. Telsey Advisory Group upped the target price to $180 from $175.

Technical analysis suggests it is good to buy as 100-day Moving Average and 100-200-day MACD Oscillator gives a strong buying opportunity.

Check out FX Empire’s earnings calendar

Wall Street Week Ahead Earnings: Zoom, Salesforce, Domino’s, Dollar Tree and Broadcom in Focus

Traders have been rattled by geopolitical tensions over the Russia-Ukraine crisis, which has caused the global stock market to suffer. The S&P 500 plunged into correction territory. If tensions continue for long, analysts fear that it will be harder for the U.S. Federal Reserve to raise rates after next month’s hike. Due to this, investors sought safe-haven assets and U.S. Treasury yields fell as tensions between Ukraine and Russia increased. In addition, investors will focus on December quarter earnings for stocks that are economically sensitive, which should show better profits than technology stocks amid surging inflation.

Earnings Calendar For The Week Of February 28

Monday (February 28)

IN THE SPOTLIGHT: ZOOM

The San Jose, California-based communications technology company Zoom is expected to report its fiscal fourth-quarter earnings of $0.67 per share, which represents a year-over-year decline of nearly 24% from $0.88 per share seen in the same period a year ago.

The company, which provides video telephony and online chat services through a cloud-based peer-to-peer software platform, would post revenue growth of 19% to $1.05 billion.

“We have seen a reluctance of investors around Zoom given recent performance of WFH winners. Look to FY23 guide as opportunity to reset Street expectations, giving investors a cleaner path to getting involved. Remain OW on early days company at upselling large installed base with ancillary products,” noted Meta Marshall, equity analyst at Morgan Stanley.

Zoom has established its position as the leader in video conferencing, now a growth market. Company has meaningful competitive moat built on more than just architecture. Position within customers makes an attractive opportunity to expand into broader UC market. Early wins encouraging. Opportunities to expand platform remain. Manageable churn post-COVID as move to hybrid work setups continues.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE FEBRUARY 28

TICKER COMPANY EPS FORECAST
AMBA Ambarella $-0.04
HPQ HP $1.04
NVAX Novavax $0.36
SBAC SBA Communications $2.62
SDC SmileDirectClub $-0.28
WDAY Workday $-0.19

 

Tuesday (March 1)

IN THE SPOTLIGHT: SALESFORCE.COM, DOMINO’S PIZZA

SALESFORCE.COM: The San Francisco, California-based software company is expected to report its fourth-quarter earnings of $0.75 per share, which represents a year-over-year decline of over 27% from $1.04 per share seen in the same period a year ago.

However, the leading provider of enterprise cloud computing solutions would post revenue growth of nearly 25% to $7.24 billion up from $5.82 billion a year earlier. The company has beaten consensus earnings estimates in most of the quarters in the last two years, at least.

Salesforce.com (CRM) is down 35% since reporting F3Q vs. IGV down 25% due to software selloff, investor fears around demand-pull forward and MuleSoft, and tougher compares in 1HF23. Our survey indicated 88% expect their pipelines to grow with 37% expecting growth of 20%+ in F23. Despite a tough set-up heading into the Q, expectations are low. CRM offers attractive risk-reward as it trades close to trough levels at 5x ’23 rev. vs. comps at 9x (40% discount). Maintain Buy,” noted Brent Thill, equity analyst at Jefferies.

DOMINO’S PIZZA: The world’s largest pizza restaurant by sales is expected to report its fourth-quarter earnings of $4.30 per share, which represents year-over-year growth of about 12% from $3.85 per share seen in the same period a year ago.

The Ann Arbor Michigan-based company has beaten consensus earnings estimates in most of the quarters in the last two years, at least. The largest pizza chain in the world would post revenue growth of 2% to around $1.38 billion from $1.36 billion a year earlier.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MARCH 1

TICKER COMPANY EPS FORECAST
AZO AutoZone $16.42
AVID Avid Technology $0.33
BIDU Baidu $1.49
DPZ Domino’s Pizza $4.30
JAZZ Jazz Pharmaceuticals $2.96
JWN Nordstrom $1.05
ROST Ross Stores $0.97
TGT Target $2.85

 

Wednesday (March 2)

IN THE SPOTLIGHT: DOLLAR TREE

The Chesapeake, Virginia-based company Dollar Tree is expected to report earnings of $1.78 per share in the fourth quarter, down over 16% from $2.13 per share seen in the same period a year ago. But the discount variety stores that sells items for $1 or less would post revenue growth of more than 5% to $7.13 billion.

“While supply chain disruptions and associated costs are top of mind given the unexpected magnitude of these costs in 2Q and ongoing impact in 3Q, we believe that Dollar Tree’s price-increase initiative will likely be a focal point for investors. More specifically, we think investors will look to better understand customer receptivity to these price increases, the degree to which these price increases can mitigate the aforementioned supply chain costs, and to what extent the company is utilizing higher price point items to diversify merchandising and sourcing,” noted Randal J. Konik, equity analyst at Jefferies.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MARCH 2

TICKER COMPANY EPS FORECAST
ANF Abercrombie & Fitch $1.59
BOX Box Inc. $-0.06
PDCO Patterson Cos. $0.50
SGFY Signify Health $0.02
SPLK Splunk $-1.08
VEEV Veeva Systems $0.59

 

Thursday (March 3)

IN THE SPOTLIGHT: BROADCOM

Chipmaker and software infrastructure supplier Broadcom is expected to report earnings per share of $8.08 in the fiscal first quarter, which represents year-over-year growth of over 22% from $6.61 per share seen in the same period a year ago.

The San Jose, California-based semiconductor manufacturer would post revenue growth of nearly 14% to $7.6 billion. The company has beaten consensus earnings estimates in most of the quarters in the last two years, at least.

Broadcom (AVGO) is a compelling franchise in semis with diversified end-market exposure, product cycle momentum in wireless and networking, and market leadership. Furthermore, we take a more constructive view than investors on the company’s software strategy, particularly its purchase of Symantec,” noted Joseph Moore, equity analyst at Morgan Stanley.

“While sentiment has gradually improved, AVGO is still trading below the SOX on a P/E basis despite superior margins and FCF. We see an increase in 5G $ content, a rebound in enterprise, and reacceleration of cloud as tailwinds through 2021; and with the company’s net leverage reduced meaningfully it should be in the position to continue to execute on tuck-in deals in software.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MARCH 3

TICKER COMPANY EPS FORECAST
BBY Best Buy $2.81
BIG Big Lots $2.19
COST Costco Wholesale $2.54
GPS Gap $-0.12
KR Kroger $0.70
WB Weibo $0.75

 

Friday (March 4)

No major earnings are scheduled for release.

The 3 Things Investors Have to Know Today

The move eliminates a bit of uncertainty by maintaining the central bank leadership that investors are already familiar with, but it also eliminates the possibility of a more dovish Fed Governor Lael Brainard becoming the next Fed Chair.

Interest rate markets

The interest rate markets have reacted accordingly with odds of three interest rate hikes in 2022 now being the most popular bet. The 10-Year Treasury punched up beyond 1.60% and several of the bigger tech stocks took it on the chin as talks of higher interest rates circulate.

Higher interest rates have many inside the market thinking faster economic growth, where cyclical sectors like Financials tend to benefit. In other words, we might be seeing more “rotation” out of technology and into financials as we move towards year end.

There’s some buzz that tech stock valuations could see some compression if long-term interest rates increase, where as the financials would be a beneficiary. We can potentially see “tax-loss selling” .

Oil market

The oil market is also creating some rotation in capital as the U.S., China, Japan, India, and South Korea prepare for a coordinated release of supplies from strategic stockpiles. Not surprisingly, OPEC is not happy about this as the release of an estimated +35 million barrels from the U.S. alone could change the current supply-demand dynamics.

OPEC claims the release is unjustified and says it may need to reassess the amount of its monthly production increases. Some interpret this as a threat by OPEC to retaliate against global oil importers and not surprisingly is raising concerns about a global energy showdown that could send oil and other energy prices soaring even higher further out on the horizon. OPEC’s next production meeting is December 2.

Biden is expected to make an announcement in regard to the stockpile release today.

Data to watch today

In economic data, investors will be digesting preliminary reads from IHS Market for Manufacturing and Services PMI. Bulls are hoping to see more evidence that supply chain logjams are starting to clear after reports indicating that ports and shippers are starting to make some headway on the backlog along the West Coast. Data yesterday showed Existing Home Sales rose again in October, though total sales were down nearly -6% compared to last year.

At the same time, the median price for single-family homes rose +13.5% year-over-year to $360,800. It’s worth noting that at least part of the increase in the median sales price has been driven by a big jump in “luxury” home sales. By price category, sales of homes priced under $250,000 fell -24% year over year in October, while sales of homes priced between $750,000 and $1 million rose +25%, and sales of million-dollar plus homes were up +31%.

New Home Sales for October are due out on Wednesday followed by Pending Home Sales next Monday. On the earnings front, results are due today from American Eagle, Best Buy, Cracker Barrel, Dell, Dick’s Sporting Goods, Dollar Tree, The Gap, HP, JM Smucker, Medtronic, and Nordstrom. Tomorrow we have John Deere reporting earnings.

Earnings to Watch in Holiday-Shortened Week: Zoom, Medtronic, Best Buy, Dollar Tree and Deere in Focus

Earnings Calendar For The Week Of November 22

Monday (November 22)

IN THE SPOTLIGHT: ZOOM

The San Jose, California-based communications technology company Zoom is expected to report its fiscal third-quarter earnings of $1.09 per share, which represents year-over-year growth of over 10% from $0.99 per share seen in the same period a year ago.

The company, which provides video telephony and online chat services through a cloud-based peer-to-peer software platform, would post revenue growth of over 30% to $1.02 billion. Zoom will report 3Q FY22 earnings after market close on Monday, November 22.

“Investors lean cautious heading into FQ3 print given ongoing concerns around SMB churn, particularly as other WFH names have underperformed. View FQ4 print as having more favourable risk/reward, but given cautious positioning, could see outperformance if SMB churn is better than expected,” noted Meta Marshall, equity analyst at Morgan Stanley.

Zoom has established its position as the leader in video conferencing, now a growth market. The company has a meaningful competitive moat built on more than just architecture. Position within customers makes an attractive opportunity to expand into the broader UC market. Early wins are encouraging. Opportunities to expand the platform remain. Manageable churn post-COVID as a move to hybrid work setups.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE NOVEMBER 22

Ticker Company EPS Forecast
JKS JinkoSolar Holding Co. Ltd. ADR -$0.07
GRFS Grifolsbarcelona $0.29
JOBS 51job $4.45
GGAL Grupo Financiero Galicia $0.68
ZM Zoom Video Communications $1.09
A Agilent $1.18
KEYS Keysight Technologies $1.64
URBN Urban Outfitters $0.83
BMA Banco Macro $1.22
TLK Telekomunikasi Indns Tbk Prshn Pp Pt $0.46

Tuesday (November 23)

IN THE SPOTLIGHT: MEDTRONIC, BEST BUY, DOLLAR TREE

MEDTRONIC: The medical device company is expected to report its fiscal second-quarter earnings of $1.29 per share, which represents year-over-year growth of over 26% from $1.02 per share seen in the same period a year ago.

The company has beaten earnings per share (EPS) estimates all times in the last four quarters with a surprise of over 13%. The Fridley, Minnesota-based medical company would post revenue growth of nearly 4% to $7.9 billion.

Medtronic (MDT) commentary and guide should act as a barometer for MedTech recovery through the balance of ’21 and into ’22. More muted recovery through October could incrementally pressure 2FQ, with the path to 9% y/y FY22 growth looking increasingly challenging in the face of recent sector headwinds,” noted Cecilia Furlong, equity analyst at Morgan Stanley.

BEST BUY: The Richfield, Minnesota consumer electronics retailer is expected to report its fiscal third-quarter earnings of $1.93 per share, which represents a year-over-year decline of over 6% from $2.06 per share seen in the same period a year ago.

The consumer electronics retailer’s revenue would decline 2.5% to $11.56 billion down from $11.85 billion a year earlier. It is worth noting that in the last two years the company has delivered an earnings share price (EPS) at all times.

“Market looking for a 4-5% comp in Q3 vs cons at -1.5%. We see upside to 2H’21 numbers and expect a raised full-year guide as demand remains strong. That said, momentum is slowing and the category could shrink in ’22/’23. The stock is +15% in the last month, and a Q3 beat and raise seems priced in,” noted Simeon Gutman, equity analyst at Morgan Stanley.

DOLLAR TREE: The Chesapeake, Virginia-based company is expected to report earnings of $0.96 per share in the third quarter, down over 30% from $1.39 per share seen in the same period a year ago. But the discount variety stores that sells items for $1 or less would post revenue growth of nearly 4% to $6.4 billion.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE NOVEMBER 23

Ticker Company EPS Forecast
CPG Compass Group £17.93
BYG Big Yellow £19.26
MDT Medtronic $1.29
BBY Best Buy $1.93
DLTR Dollar Tree $0.96
J Jacobs Engineering Group Inc $1.57
BURL Burlington Stores $1.24
SJM J.M. Smucker $2.04
DKS Dick’s Sporting Goods $2.03
PLAN Progressive Planet -$0.11
AEO American Eagle Outfitters $0.60
ANF Abercrombie & Fitch $0.65
DY Dycom Industries $0.75
JWN Nordstrom $0.56
NOAH Noah $2.95
VMW VMware $1.54
HPQ HP $0.88
GME GameStop -$0.51
CPB Campbell Soup $0.81
GPS Gap $0.50
SVT Severn Trent £49.79

Wednesday (November 24)

IN THE SPOTLIGHT: DEERE

Deere & Company, the world’s largest maker of farm equipment, is expected to report its fiscal fourth-quarter earnings of $3.92 per share, which represents year-over-year growth of over 64% from $2.39 per share seen in the same period a year ago.

The agricultural, construction and forestry equipment manufacturer would post revenue growth of more than 20% to $10.5 billion. It is worth noting that in the last two years the company has delivered an earnings share price (EPS) at all times.

“Despite positive secular demand fundamentals within both the Ag and Construction businesses we are lowering near-term estimates for Deere (DE) (F4Q21/F1Q22) to better reflect the impact from lost production in the US stemming from supplier bottlenecks and the labour strike,” noted Stephen Volkmann, equity analyst at Jefferies.

“We assume any lost production elongates the cycle, and we maintain our above Consensus estimates for 2023 noting additional upside from the infrastructure bill has yet to be factored into outlooks.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE NOVEMBER 24

Ticker Company EPS Forecast
UU United Utilities £25.21
JMAT Johnson Matthey £44.57
BVIC Britvic £31.37
DE Deere & Company $3.92
TCOM Trip.com Group Ltd $0.11
KC Kutcho Copper -$1.53

Thursday (November 25)

No major earnings are scheduled for release. The U.S. stock market will be closed for the Thanksgiving holiday.

Friday (November 26)

No major earnings are scheduled for release. The U.S. stock market will be closed for the Thanksgiving holiday.

Why Dollar Tree Stock Is Up By 16% Today

Dollar Tree Shares Rally After Company Increases Its Stock Buyback Program

Shares of Dollar Tree gained strong upside momentum after the company announced that it increased its share repurchase authorization by $1.05 billion to an aggregate amount of $2.5 billion.

This is a major development for the stock which was down by 20% year-to-date before today’s trading session. The company stated: “[…] with the meaningful free cash flow from our business, we expect to maintain share repuchasing as an important part of our capital allocation strategy”.

Previously, Dollar Tree announced that it would begin adding new price points above $1 across all Dollar Tree Plus stores. It will also start to test price points above $1 in some legacy Dollar Tree stores.

What’s Next For Dollar Tree Stock?

Analysts expect that Dollar Tree will report earnings of $5.57 per share in the current year and $6.33 per share in the next year. Earnings estimates continued to move lower after the release of the company’s quarterly report at the end of August, which served as an additional bearish catalyst for the stock.

However, the market will now focus on the expansion of the stock buyback program and the company’s decision to introduce higher price points to its stores. The decision to set some prices above $1 is natural given the constant decline in the purchasing power of $1 and the recent increase in inflation.

It remains to be seen whether analysts will rush to change their estimates or wait for additional data on the performance of the company’s stores, but some traders have already made their bullish bets. At current prices, Dollar Tree will be able to buy about 25 million of its shares, which is a significant amount for a company which has 225 million shares outstanding and whose daily trading volume is less than 3 million. This is a significant development, and the stock has a chance to settle above the $100 level.

For a look at all of today’s economic events, check out our economic events.

Wall Street Retreats From Record Highs on Taper Concerns

All three major U.S. stock indexes extended their declines after hawkish commentary from Dallas Fed President Robert Kaplan and a blast outside the Kabul airport in Afghanistan helped fuel the risk-off sentiment.

Kaplan, who is not currently a voting member of the Federal Open Markets Committee, said he believes the progress of economic recovery warrants tapering of the Fed’s asset purchases to commence in October or shortly thereafter.

Kaplan’s remarks followed earlier comments from the St. Louis Fed President James Bullard, who said that the central bank is “coalescing” around a plan to begin tapering process.

“There’s a lot of focus over what will come out of Jackson Hole meeting,” said Bill Northey, senior investment director at U.S. Bank Wealth Management in Minneapolis. “Whether we will see new information regarding inflection point in (Fed) policy or whether that will be deferred to the next meeting in September.”

Regarding the recovery, the economy grew at a slightly faster pace than originally reported in the second quarter, fully recovering its losses from the most abrupt downturn in U.S. history, according to the Commerce Department. But jobless claims, though still on a downward trajectory, ticked higher last week.

The data did little to move the needle with respect to expectations that the Fed is unlikely tip its hand regarding the taper timeline when Chairman Jerome Powell unmutes and delivers his speech at Friday’s virtual Jackson Hole Symposium.

“We’re transitioning between two horizons, the first being the reopening of the economy,” Northey added. “There’s little question that the data is strong across the U.S. economy.

“Horizon two is when we get back to economic normalization,” he continued. “There’s concert about the Delta variant extending the timeline between horizon one and horizon two.”

The Dow Jones Industrial Average fell 89.35 points, or 0.25%, to 35,316.15, the S&P 500 lost 13.6 points, or 0.30%, to 4,482.59 and the Nasdaq Composite dropped 33.42 points, or 0.22%, to 15,008.44.

Of the 11 major sectors in the S&P 500, all but real estate were in the red, with energy stocks suffering the steepest percentage loss after several sessions of strong gains.

Discount retailers Dollar General Corp and Dollar Tree Inc tumbled 3.8% and 11.9%, respectively, after warning higher transportation costs will hurt their bottom lines.

Coty Inc jumped 14.8% after the cosmetics firm said it expects to post full-year sales growth for the first time in three years.

Salesforce.com Inc hiked its earnings forecast as the shift to a hybrid work model is expected to fuel strong demand. Its shares advanced 4.9%.

NetApp Inc jumped 5.6% as brokerages raised their price targets in the wake of the cloud computing firm’s better-than expected 2022 earnings outlook.

Declining issues outnumbered advancing ones on the NYSE by a 2.29-to-1 ratio; on Nasdaq, a 1.44-to-1 ratio favored decliners.

The S&P 500 posted 29 new 52-week highs and two new lows; the Nasdaq Composite recorded 74 new highs and 33 new lows.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Stephen Culp; Additional reporting by Devik Jain in Bengaluru; Editing by Marguerita Choy)

 

Wall Street Week Ahead: Best Buy, Medtronic, Autodesk and Dollar General in Focus

Earnings Calendar For The Week Of August 23

Monday (August 23)

Ticker Company EPS Forecast
JD JD.com $2.69
EDU New Oriental Education Tech $0.02
RBREW Royal Unibrew A/S kr8.25
PANW Palo Alto Networks $1.43
GRUB GrubHub $0.27
MSNFY Minera Frisco ADR $0.01
TLK Telekomunikasi Indns Tbk Prshn Pp Pt $0.41
GPFOY Financiero Inbursa ADR $0.14
SUMO Sumo -$0.14
JOBS 51job $3.77
CBPO China Biologic $1.33
TV Grupo Televisa Sab $0.10

Tuesday (August 24)

IN THE SPOTLIGHT: BEST BUY, MEDTRONIC

BEST BUY: The Richfield, Minnesota consumer electronics retailer is expected to report its second-quarter earnings of $1.89 per share, which represents year-over-year growth of over 10% from $1.71 per share seen in the same period a year ago.

In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 36%. The consumer electronics retailer would post year-over-year revenue growth of over 17% to $11.6 billion. According to ZACKS Research, full-year earnings to be at $8.53 per share and revenue of $49.56 billion, rising +7.84% and +4.86% year-over-year, respectively.

Best Buy (BBY) is a best-in-class retailer led by a capable management team, and we are positive on the longer-term opportunity for the business and stock. BBY’s leading position in a healthy category and strength in key Retail fundamentals including merchandising, labour management, supply chain and omnichannel underpin our view,” noted Simeon Gutman, equity analyst at Morgan Stanley.

“We think BBY can sustain >5% EBIT margins after pulling forward its margin target by 5 years during the COVID-19 pandemic. This is reliant on generating SG&A efficiencies, which we believe are possible given BBY’s strong track record in this arena.”

MEDTRONIC: An American-Irish medical device company, is expected to report its fiscal first-quarter earnings of $1.32 per share, which represents year-over-year growth of over 112% from $0.62 per share seen in the same period a year ago.

In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 45%. The Fridley, Minnesota-based medical company would post year-over-year revenue growth of over 20% to $7.8 billion.

Medtronic is well aligned with our 2021 pro-recovery thesis, and we see sustainable 5%+ organic growth driven by the company’s ~5% WAMGR and supported by pipeline product launches & tuck-in M&A contributions (Micra AV, EV-ICD, EPIX, RDN, Zeus/Synergy, 780G, InPen, DTM, Interstim Micro, and the soft tisssue robot),” noted Cecilia Furlong, equity analyst at Morgan Stanley.

“CEO Geoff Martha has committed to initiatives to smooth bulk purchasing and deliver more consistent results and redeploy $450mn annual OpEx savings toward innovation & product reinvestment.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE AUGUST 24

Ticker Company EPS Forecast
BNS Scotiabank $1.90
BMO Bank Of Montreal USA $2.93
MDT Medtronic $1.32
BBY Best Buy $1.89
HTHT Huazhu Group Limited $1.04
INTU Intuit $1.59
HEI Heico $0.55
TOL Toll Brothers $1.49
URBN Urban Outfitters $0.78
JWN Nordstrom $0.27
VNET 21Vianet -$0.31
ACH Aluminum Of China $0.22

Wednesday (August 25)

IN THE SPOTLIGHT: AUTODESK

Autodesk, a leading provider of drafting and design software for the building, and infrastructure fields is expected to report its second-quarter earnings of $1.12 per share, which represents year-over-year growth of over 14% from $0.98 per share seen in the same period a year ago.

In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 9%. The San Rafael, California-based company would post year-over-year revenue growth of over 15% to $1.05 billion.

For the fiscal second quarter, the company expects revenues between $1.045 billion and $1.06 million. The company expects non-GAAP earnings of $1.08-$1.14 per share.

“Upside in resellers’ Q2 performance & forward expectations increases confidence ADSK is on track to hit revenue & billings growth guides in FY22, despite a back-end loaded year. Our ests are towards the high-end of guidance & forecast achieving $2.4B FY23 FCF target. Resume coverage at a price target of $334,” noted Keith Weiss, equity analyst at Morgan Stanley.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE AUGUST 25

Ticker Company EPS Forecast
SYDB Sydbank A/S kr5.70
ATHM Autohome $6.32
RY Royal Bank Of Canada $2.70
DKS Dick’s Sporting Goods $2.83
KC Kutcho Copper -$1.34
ADSK Autodesk $1.12
SPLK Splunk -$0.69
NTAP NetApp $0.95
BOX BOX $0.18
CRM Salesforce.com $0.92
ULTA Ulta Salon Cosmetics Fragrance $2.50
SNOW Intrawest Resorts -$0.15
WSM Williams Sonoma $2.59
ASND Ascendant Resources -$2.23
SHI SinOPEC Shanghai Petrochemical $1.23
LFC China Life $0.40
PTR Petrochina $1.13
BAVA Bavarian Nordic As kr0.57
PLAN Progressive Planet -$0.14
SMTC Semtech $0.62
DY Dycom Industries $0.74
RAVN Raven Industries $0.20

Thursday (August 26)

IN THE SPOTLIGHT: DOLLAR GENERAL

The U.S. largest discount retailer by the number of stores Dollar General is expected to report a profit of $2.59 in the second quarter, which represents a year-over-year decline of about 17% from $3.12 per share seen in the same quarter a year ago.

The company’s revenue would also decline 1.5% to 8.56 billion. In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 9%.

“Dollar General (DG) is a best-in-class operator offering a rare combination of 1) consistent, high-quality top-and bottom-line results; 2) visible store growth; and 3) a shareholder-friendly capital allocation policy. Recent high-quality results add more confidence to the 10% L-T EPS growth algorithm, ramping top-line initiatives appear sustainable, and we see underappreciated margin upside from the rollout of Fresh self-distribution,” noted Simeon Gutman, equity analyst at Morgan Stanley.

“DG’s valuation (high teens P/E multiple) presents a solid entry point as it is in line with its history despite much stronger EPS power (and below DG’s pre-COVID multiple) while a ~5x turn discount to the market. This seems unwarranted given DG’s consistent execution & outlook.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE AUGUST 26

Ticker Company EPS Forecast
BURL Burlington Stores $1.45
HAIN Hain Celestial $0.39
CM Canadian Imperial Bank Of Commerce USA $2.72
TD Toronto-Dominion Bank $1.53
SJM J.M. Smucker $1.88
ANF Abercrombie & Fitch $0.76
DLTR Dollar Tree $1.02
SAFM Sanderson Farms $6.38
LANC Lancaster Colony $1.31
COTY Coty -$0.06
DG Dollar General $2.59
PTON Peloton Interactive, Inc. -$0.44
HPQ HP $0.84
VMW VMware $1.65
WDAY Workday $0.78
GPS Gap $0.46
MRVL Marvell Technology $0.31

Friday (August 27)

Ticker Company EPS Forecast
ZNH China Southern Airlines -$0.77
CICHY China Construction Bank Corp $0.90
SNP China Petroleum Chemical $2.42
LEGN LEG Immobilien AG -$0.31
For a look at all of today’s economic events, check out our economic calendar.

Why Shares Of Dollar Tree Are Rallying Today?

Dollar Tree Video 03.03.21.

Dollar Tree Stock Moves Higher After Solid Earnings Report

Shares of Dollar Tree are gaining more than 3.5% in today’s trading session after the company released its fourth-quarter earnings report.

Dollar Tree reported revenue of $6.77 billion and GAAP earnings of $2.13 per share, beating analyst estimates on earnings and meeting them on revenue. Same-store sales showed solid growth in all segments, and the company continued to expand the number of its stores.

Dollar Tree also stated that the combination of Dollar Tree And Family Dollar stores proved to be a great format for small towns and that such Combination Stores were delivering a same-store sales lift of greater than 20% on average.

The market is clearly pleased with the report which showed that Dollar Tree continued to perform well in the fourth quarter. In addition, the company’s Board of Directors increased the share repurchase authorization by $2 billion which served as a bullish catalyst. At current stock price, Dollar Tree will repurchase about 19.4 million shares, while the number of shares outstanding is about 236 million.

What’s Next For Dollar Tree?

Shares of Dollar Tree had a challenging start of 2021 as traders bet that the healthy recovery of the economy will put pressure on discount stores. Shares of Dollar Tree’s peers were under pressure as well.

However, the strong fourth-quarter report and the decision to increase share buyback may serve as sufficient upside catalysts which may stop the local downside trend.

It should be noted that the U.S. will soon deliver a huge $1.9 trillion stimulus package which will boost consumer activity. It remains to be seen how much of $1,400 stimulus checks will be put into purchases in discount stores, but the new package will certainly boost sales of most retailers.

The stock is currently trading at about 17 forward P/E which is not very cheap, but the whole market is expensive right now so many investors will likely find Dollar Tree attractive enough at current levels.

For a look at all of today’s economic events, check out our economic calendar.

Earnings to Watch Next Week: Zoom, Target, Dollar Tree and Costco in Focus

Earnings Calendar For The Week Of March 1

Monday (March 1)

IN THE SPOTLIGHT: ZOOM

Zoom Video Communications Inc is expected to report a profit of $0.79 per share in the fourth quarter, which represents year-over-year growth of over 425% from $0.15 per share seen in the same quarter a year ago.

The company, which provides videotelephony and online chat services through a cloud-based peer-to-peer software platform, would post year-over-year revenue growth of over 330% to $811.77 million.

“As work-from-home (WFH) persists and Zoom (ZM) Phone gains traction, ZM appears to set up for a strong FQ4 print. More than FQ4/FQ1 report/guide, investor focus/reaction likely based on whether co guides full FY22. Would view the full-year guide as a pos NT catalyst given cautious investor sentiment, however, remain Equal-weight given 2H comps,” noted Meta A Marshall, an equity analyst at Morgan Stanley.

Zoom has established its position as the newly emerged leader in video conferencing, now a growth market, largely credible to the company itself given an introduction of a solution that employees actually use. The company has a meaningful competitive moat built on more than just architecture, but a rapid uptick in video usage has attracted significant investment efforts from competitors. Position within customers makes an attractive opportunity to expand into the broader UC market. Early wins encouraging. Environment post-COVID-19 and large-scale WFH, and timing to reach, less certain.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MARCH 1

Ticker Company EPS Forecast
BNZL Bunzl £71.65
FMX Fomento Economico Mexicano Sab $14.49
XRAY Dentsply International $0.64
PRGO Perrigo $1.01
TGNA Tegna $1.13
AXSM Axsome Therapeutics Inc -$0.75
EVTC Evertec $0.55
THRM Gentherm $0.65
BZLFY Bunzl plc $0.13
NRG NRG Energy $0.45
MIDD Middleby $1.40
AY Atlantica Yield $0.23
ZM Zoom Video Communications $0.79
NVAX Novavax -$1.78
TTEC TeleTech $0.71
AMRC Ameresco $0.29
IPAR Inter Parfums $0.30
NSTG NanoString Technologies -$0.50
AI Arlington Asset Investment -$0.19
CCXI ChemoCentryx -$0.33
CYRX Cryoport Inc -$0.05
SGMS Scientific Games -$0.44
DDD 3D Systems $0.09
SRPT Sarepta Therapeutics -$1.80
NGHC National General $0.73
SRNE Sorrento Therape -$0.23
JD JD.com $0.22
AIV Apartment $0.01
PKX Posco $1.52
BKRKY Bank Rakyat $0.13
OSH Oak Street Health -$0.25
YALA Yalla $0.12
KHOLY Koc Holdings AS $0.55
DM Dominion Midstream Partners -$0.06
CXO Concho Resources $1.18
MNTA Momenta Pharmaceuticals -$0.50
PE Parsley Energy $0.25
BEAT BioTelemetry $0.48

 

Tuesday (March 2)

IN THE SPOTLIGHT: TARGET

The eighth-largest retailer in the United States is expected to report a profit of $2.55 per share in the fourth quarter, which represents year-over-year growth of over 50% from $1.69 per share seen in the same quarter a year ago. In the last four consecutive quarters, on average, the company has delivered an earnings surprise of 60%.

The Minneapolis, Minnesota-based company would post year-over-year revenue growth of over 17% to $27.419 billion.

“We maintain our 4Q20 EPS estimate of $2.55 on comps +17.2%, in line with holiday sales, but could see upside on stimulus benefit in Jan. We model FY21 EPS of $8.96, +2% above Street. TGT’s ability to comp the comp will be the headline topic at its Investor Day, and management could conservatively guide FY21 comps and EPS to -LSD to -MSD,” said Oliver Chen, equity analyst at Cowen and Company.

“Fundamentally, we do believe TGT’s momentum is well-positioned to continue as consumers invest in home, appreciate TGT’s private brands, and take advantage of a myriad of convenient and innovative shopping modalities including Drive-Up; furthermore, the backdrop of stimulus payments and a high savings rate are strong positives.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MARCH 2

Ticker Company EPS Forecast
SYDB Sydbank A/S kr3.14
CRDA Croda International £84.78
TW Taylor Wimpey £17.00
WEIR Weir Group £43.79
TPK Travis Perkins £43.60
ROR Rotork £6.25
TGT Target $2.55
AZO AutoZone $12.80
KSS Kohl’s $0.99
AER AerCap $0.94
AMRS Amyris -$0.12
SE Spectra Energy -$0.55
DAR Darling Ingredients $0.38
QTRX Quanterix -$0.33
VEEV Veeva Systems $0.68
ROST Ross Stores $1.00
HPE Hewlett Packard $0.41
JWN Nordstrom $0.13
AMBA Ambarella $0.08
GO Grocery Outlet Holding Corp $0.23
URBN Urban Outfitters $0.28
BOX BOX $0.17
ALLK Allakos -$0.85
AHT Ashtead Group £0.29
EDEN Edenred €0.65
ITRK Intertek Group £83.44
IGT International Game Technology $0.04
EMG Man Group £0.07
MSNFY Minera Frisco ADR $0.03
AVAV AeroVironment $0.01
TGTX TG Therapeutics -$0.57

 

Wednesday (March 3)

IN THE SPOTLIGHT: DOLLAR TREE

Chesapeake, Virginia-based discount variety stores that sells items for $1 or less is expected to report a profit of $2.12 per share in the fiscal fourth quarter, which represents year-over-year growth of over 18% from $1.79 per share seen in the same quarter a year ago.

In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 14%.

The Fortune 500 company, which operates 15,115 stores throughout the 48 contiguous U.S. states and Canada, would post year-over-year revenue growth of over 7% to $6,774 million.

Dollar Tree’s namesake banner has a long history of strong performance, enabled by its differentiated value proposition, but its Family Dollar unit has struggled to generate top-line and margin growth since it was acquired in 2015. We suspect the Dollar Tree banner is better-positioned long-term, but do not believe the aggregated firm benefits from a durable competitive edge, as competitive pressure in a fast-changing retail environment amid minimal switching costs limits results. We expect the COVID-19 pandemic’s effects to be confined to the near term, leaving the long-term competitive dynamic intact,” said Zain Akbari, equity analyst at Morningstar.

“We expect comparable sales gains in the mid-single digits for the Dollar Tree banner and high-single-digits for Family Dollar in the fourth quarter, as rising infection rates led customers to stock up with a focus on essentials and value. Cost leverage should drive the quarter’s operating margin higher by nearly 100 basis points (to 10%) versus the same period in fiscal 2019. We expect sales to normalize in 2021as vaccines gradually contain the pandemic.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MARCH 3

Ticker Company EPS Forecast
DLTR Dollar Tree $2.12
WEN Wendy’s $0.18
TAC TransAlta USA -$0.07
PDCO Patterson Companies $0.51
DY Dycom Industries $0.04
MRVL Marvell Technology $0.29
SNOW Intrawest Resorts -$0.17
SPLK Splunk $0.03
AEO American Eagle Outfitters $0.36
SQM Sociedad Quimica Y Minera De Chile $0.22
TCOM Trip.com Group Ltd $0.28
YEXT Yext Inc. -$0.08
MTLS Materialise $0.01
CPB Campbell Soup $0.83
NAV Navistar International -$0.02
VNET 21Vianet $0.05
ABM ABM Industries $0.58

 

Thursday (March 4)

IN THE SPOTLIGHT: COSTCO WHOLESALE

The largest wholesale club operator in the U.S. is expected to report a profit of $2.44 in the fiscal second quarter, which represents year-over-year growth of over 16% from $2.10 per share seen in the same quarter a year ago.

In the last four consecutive quarters, on average, the company has delivered an earnings surprise of 8.8%.

COST’s results have consistently been among the best in Retail. Over the past decade, COST has delivered 6% comps and 10% EBIT growth on average. It is rare to find a business with COST’s solid comp/membership growth, while relative e-commerce insulation differentiates its value proposition from other retailers,” said Simeon Gutman, equity analyst at Morgan Stanley.

“We are Overweight even as the stock trades at an elevated valuation given COST’s scarcity value, safety, and scale. In the near-term, we expect incremental sales uplifts from COVID-19 disruption, and earnings power looks stronger despite COVID-19 expenses.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MARCH 4

Ticker Company EPS Forecast
KR Kroger $0.69
TTC Toro $0.74
BJ BJs Wholesale Club Holdings Inc $0.67
BZUN Buzzi Unicem RSP $3.55
BURL Burlington Stores $2.11
CIEN Ciena $0.45
MIK Michaels Companies $1.41
JAMF Jamf $0.01
AVGO Avago Technologies $6.56
MDLA Medallia, Inc. -$0.01
GWRE Guidewire Software -$0.01
COO Cooper Companies $2.77
GPS Gap $0.19
COST Costco Wholesale $2.44
GOL Gol Linhas Aereas Inteligentes -$0.41
ALXO Alx Oncology Holdings Inc. -$0.36
AUOTY AU Optronics $0.31
TOELY Tokyo Electron Ltd PK $0.80
FIZZ National Beverage $0.33
CMD Cantel Medical Corp $0.49
PHI Philippine Long Distance Telephone $0.63
MBT Mobile TeleSystems OJSC $17.30
CNQ Canadian Natural Resource USA $0.10

 

Friday (March 5)

Ticker Company EPS Forecast
BIG Big Lots $2.50

 

Dollar Tree Gains Amid New CEO Appointment

Dollar Tree, Inc. (DLTR) shares climbed 1.74% Monday after the discount variety retailer said it had appointed Michael Witynski as its new chief executive officer. Witynski, will succeed outgoing CEO Gary Philbin, who had been in the role since 2017. He brings comprehensive experience to the top job, having served as the company’s chief operating officer, and most recently as its enterprise president. To facilitate a smooth transition, Philbin will remain as an executive and board member until Sept. 23, 2020.

The timing of the move in the middle of a global pandemic raised eyebrows with some analysts. ‘While past promotions made it fairly obvious that Mr. Witynski was being groomed as the next in line, timing of the news is a bit peculiar, in our view,’ Jefferies analyst Christopher Mandeville wrote in a note to clients cited by Barron’s. However, the analyst believes Witynski’s focus on sales and margins justified the market’s positive reaction.

Dollar Tree stock has a market capitalization of $23 billion and trades 3.26% higher on the year through July 20. Performance has improved over the last three months, with the shares gaining 23%.

Navigating the Pandemic

The retailer told investors in May that it has access to a $1.25 million credit line and holds around $1.9 million in cash and investments to ride out uncertainty caused by the pandemic. Dollar Tree also said it plans to halt its repurchase program for the immediate future, though its current buyback has $800 million remaining. At the store level, the firm has reduced its planned renovations this year to 750 from its original expectation of 1,250.

Wall Street View

The majority of analysts remain neutral on the stock as they wait for further clarity about earnings in the coming quarters. Currently, it receives 13 ‘Hold’ ratings, 1 “Overweight’ rating, and 10 ‘Buy’ ratings. The 12-month Street consensus price target on Dollar Tree shares sits at $105.50. This represents an 8.6% premium to Monday’s $97.12 close.

Technical Outlook

The share price broke above a multi-month downtrend line in mid-May but has traded within a symmetrical triangle since. Price started to climb above the pattern’s top trendline last week, with gains consolidating Monday as traders digested the CEO announcement. In the coming days, watch for a cross of the 50-day simple moving average (SMA) above the 200-day SMA. Technical analysts refer to this as a golden cross – a signal that indicates the formation of a new uptrend. If the upside continues, look for a test of the 52-week high around $120. Alternatively, a breakdown below the triangle could see a test of crucial support at $75.