Telsey Maintains ‘Market Perform’ Rating on Dollar Tree (DLTR), Raises Price Target to $100

On June 4, Telsey analysts increased their price target for Dollar Tree Inc. (NASDAQ:DLTR) to $100 from $95 while maintaining a ‘Market Perform’ rating. The analysts cited Dollar Tree’s advancement in its ongoing transformation initiatives.

A busy grocery store aisle stocked with the company’s weight management products.

Besides transformation initiatives, Telsey also cited Dollar Tree’s Q1 2025 financial performance as a key factor in their decision. In the quarter, Dollar Tree posted $1.26 in adjusted earnings per share (EPS), beating Telsey’s estimate of $1.22. Comparable sales rose 5.4%, surpassing Telsey’s 4.0% forecast.

Telsey’s analysis identified strong category growth as the key driver of Dollar Tree’s performance in Q1 2025. For a start, consumables sales, representing 50.4% of total sales, increased 6.4%. On the other hand, discretionary sales grew 4.6%. Dollar Tree also recorded a 2.5% increase in customer traffic and a 2.8% rise in average transaction value during the period.

Central to Dollar Tree’s transformation is its multi-price 3.0 store format, the analysts found. The company has implemented the format in approximately 3,500 stores. Dollar Tree expects this format to reach half of all stores by the end of 2025. The new format maintains the company’s value proposition with an average unit retail price of about $1.35 and 85% of items priced under $2.

Additionally, customer engagement metrics showed positive trends during the quarter. The number of customers visiting Dollar Tree stores three or more times monthly increased by 9%. The company also added approximately 2.6 million new customers in the quarter, with many coming from upper-income households. According to Telsey’s assessment, these operational improvements and customer growth metrics support the company’s transformation strategy despite ongoing earnings challenges.

Dollar Tree Inc. (NASDAQ:DLTR) operates discount retail stores across the United States and Canada. The company operates two main segments: Dollar Tree stores, which sell merchandise primarily at fixed price points of $1.25 or less, and Family Dollar stores, which offer a broader range of merchandise at various price points up to $10.

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