Discount retailer Dollar Tree (DLTR), which operates the Family Dollar and Dollar Tree chains of stores, is scheduled to announce its results for the fourth quarter of Fiscal 2024 before the market opens on Wednesday, March 26. DLTR stock is down more than 44% over the past year amid the impact of macro pressures on discretionary spending. Wall Street analysts expect DLTR’s Q4 FY24 earnings per share (EPS) to decline about 14% year over year to $2.20.
The decline in Q4 earnings is expected to be due to a 4.5% estimated fall in revenue to $8.24 billion, margin pressures, and forex headwinds. Investors will be keen to know management’s commentary about the impact of tariffs on the retailer’s business.
Analysts’ Views Ahead of Dollar Tree’s Q4 Earnings
Heading into the Q4 results, Jefferies analyst Randal J. Konik maintained a Hold rating on Dollar Tree stock with a price target of $75. Konik highlighted that investor conversations have been focused on core Dollar Tree performance, which has been somewhat uneven. He noted that concerns over tariffs have been an overhang and perhaps not fully priced into estimates yet.
Konik added that the strategic review of the Family Dollar chain continues and could be a potential catalyst for DLTR stock. That said, he contended that the outcome and timing of this review remain uncertain. He concluded that sentiment on the Dollar Tree channel has been mixed, and this could bode well for DLTR stock over the near term.
Meanwhile, Bank of America analyst Robert Ohmes reiterated a Sell rating on DLTR stock with a price target of $75 due to multiple factors, including the downside risk to EPS forecast, which is slightly below the Street’s consensus, and a slower-than-expected sales growth in the Dollar Tree banner. The 5-star analyst cautioned that tariffs could weigh on DTLR’s gross margin, especially given the high percentage of direct imports in the Dollar Tree banner.
Options Traders Anticipate Major Move on DLTR’s Q4 Earnings
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you.
Indeed, it currently says that options traders are expecting about 13.4% move in either direction in DLTR stock in reaction to Q4 FY24 results.
Is DLTR a Good Stock to Buy?
Overall, Wall Street is cautiously optimistic on Dollar Tree stock ahead of the Q4 FY24 results. DLTR stock scores a Moderate Buy consensus rating based on four Buys, four Holds, and one Sell recommendation. The average DLTR stock price target of $83 implies about 19% upside potential from current levels.
Questions or Comments about the article? Write to editor@tipranks.com