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Why Dollar Tree (DLTR) Dipped More Than Broader Market Today

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The latest trading session saw Dollar Tree (DLTR - Free Report) ending at $67.86, denoting a -0.24% adjustment from its last day's close. This change lagged the S&P 500's daily loss of 0.02%. At the same time, the Dow added 0.38%, and the tech-heavy Nasdaq gained 0.04%.

Prior to today's trading, shares of the discount retailer had lost 10.11% over the past month. This has lagged the Retail-Wholesale sector's gain of 3.68% and the S&P 500's gain of 3.77% in that time.

Analysts and investors alike will be keeping a close eye on the performance of Dollar Tree in its upcoming earnings disclosure. The company's upcoming EPS is projected at $1.06, signifying a 9.28% increase compared to the same quarter of the previous year. Alongside, our most recent consensus estimate is anticipating revenue of $7.45 billion, indicating a 1.88% upward movement from the same quarter last year.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $5.33 per share and a revenue of $30.71 billion, signifying shifts of -9.51% and +0.34%, respectively, from the last year.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Dollar Tree. These recent revisions tend to reflect the evolving nature of short-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.03% decrease. At present, Dollar Tree boasts a Zacks Rank of #5 (Strong Sell).

With respect to valuation, Dollar Tree is currently being traded at a Forward P/E ratio of 12.77. For comparison, its industry has an average Forward P/E of 20.72, which means Dollar Tree is trading at a discount to the group.

We can additionally observe that DLTR currently boasts a PEG ratio of 2.88. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Retail - Discount Stores was holding an average PEG ratio of 2.4 at yesterday's closing price.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 157, placing it within the bottom 38% of over 250 industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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