What Happened?
Shares of discount treasure-hunt retailer Dollar Tree (NASDAQ: DLTR) jumped 3.9% in the morning session after the company reported better-than-expected third-quarter results and raised its full-year earnings forecast. The discount retailer's adjusted earnings per share landed at $1.21, which surpassed analysts' expectations, while revenue for the quarter climbed 9.4%. This performance was supported by a successful strategy of increasing price points on some items. The company's CEO, Michael Creedon, highlighted that this approach broadened its value proposition and helped drive profitability. Adding to the positive sentiment, Guggenheim analyst John Heinbockel increased the firm's price target on the stock to $130 from $125 and kept a "Buy" rating, showing confidence in Dollar Tree's market plan.
Is now the time to buy Dollar Tree? Access our full analysis report here.
What Is The Market Telling Us
Dollar Tree’s shares are quite volatile and have had 16 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was about 20 hours ago when the stock gained 2.4% on the news that the company reported better-than-expected third-quarter results and raised its full-year earnings forecast. The discount retailer's adjusted earnings per share landed at $1.21, which surpassed analysts' expectations. Revenue for the quarter also climbed 9.4% to $4.7 billion, helped by a 4.2% increase in same-store sales. Following the strong performance, Dollar Tree lifted its financial outlook for the full year. The company projected adjusted earnings per share in a range of $5.60 to $5.80, up from its previous forecast. It also raised its sales expectations. The positive report led several analysts to increase their price targets for the stock.
Dollar Tree is up 61.4% since the beginning of the year, and at $123.42 per share, has set a new 52-week high. Investors who bought $1,000 worth of Dollar Tree’s shares 5 years ago would now be looking at an investment worth $1,102.
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