Dollar Tree Inc. (NASDAQ:DLTR) has confirmed that it will release its Q4 2022 on Wednesday, March 2, 2022.
What to look for
Earnings:Stockearning’s Estimated EPS for Q4 2022 is expected to be $1.78 per share compared to a year ago when the company had EPs of $2.13. In the third quarter, the company had an EPS of $0.96. Historical EPS Performance indicates that in the past 12 quarters, the company has topped estimates 19 times (52%), met once (2%), and missed estimates 16 times (44%).
Revenue: The company is expected to report sales of $7.13 billion compared to 6.77 billion a year ago, suggesting a YoY increase of 5.3%. Revenue was $26.36 billion for the full year, with estimates of between $26.33 billion and $26.48 billion. Dollar Tree expects revenue of around $27.77 billion for the next fiscal year.
Stock movement: Dollar Tree shares have gained 7.8%% since the company released its Q3 2022 earnings. Interestingly, the company’s shares have been UP 29 times out of the past 48 quarters. So, the historical price reaction suggests a 60% probability of the share price going UP following the fiscal Q4 2022 earnings release. According to the Stockearning algorithm, the predicted volatility on the first day is +/-6%, while the predicted volatility on the seventh day is +/-6%.
What analysts are saying: Piper Sandler analyst Peter Keith raised his price target on the stock from $144 to $147 and maintained a Hold rating on the shares. Keith told investors in a research report that the company's answer to activist Mantle Ridge "went flat" and "didn't address several major issues." According to the expert, the Dollar Tree board should consider Rick Dreiling more seriously. A few of Mantle Ridge's selections are "very intriguing," according to him.
Goldman Sachs analyst Kate McShane downgraded the stock from Buy to Hold but raised the price target from $116 to $150. While her high price target represents a roll-forward of elevated projections and a greater market multiple, the analyst downgraded the stock for three reasons: an anticipated sudden change by the low-end customer to focus on necessities, while the Dollar Tree's initiatives are heavily focused on discretionary growth; the reality that traffic is declining at both of the firm's banners notwithstanding the simple lapping comparisons; and a belief that the stock is trading at comprehensive valuation.
Evercore ISI analyst Michael Montani raised the company’s price target on the stock from $125 to $150 and maintained a Hold rating in the shares. He noted that the firm is breaking the $1 price point earlier than expected. As a result, he now views the company as a shared winner in 2022, rather than a share loser, despite the fact that Q3 statistics show "deep" freight challenges and continued share losses and traffic decreases.
After Dollar Tree announced the establishment of a $1.25 price point expected to generate short-term sales upside, BofA analyst Robert Ohmes raised his price objective on Dollar Tree to $108 from $90. Ohmes, on the other hand, finds multiple dangers in Dollar Tree's "dramatic" price rise plan, including the possibility of decreasing traffic regularity in what he terms "an already poor traffic scenario for small retailers," and maintains a Sell rating on the stock.
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