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Why the Market Dipped But Dollar Tree (DLTR) Gained Today

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The latest trading session saw Dollar Tree (DLTR - Free Report) ending at $71.08, denoting a +1.05% adjustment from its last day's close. The stock outpaced the S&P 500's daily loss of 0.21%. On the other hand, the Dow registered a loss of 0.16%, and the technology-centric Nasdaq decreased by 0.89%.

Shares of the discount retailer have appreciated by 1.54% over the course of the past month, outperforming the Retail-Wholesale sector's loss of 2.84% and the S&P 500's loss of 1.56%.

Investors will be eagerly watching for the performance of Dollar Tree in its upcoming earnings disclosure. On that day, Dollar Tree is projected to report earnings of $2.18 per share, which would represent a year-over-year decline of 14.51%. Meanwhile, the latest consensus estimate predicts the revenue to be $8.24 billion, indicating a 4.61% decrease compared to the same quarter of the previous year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $5.39 per share and revenue of $30.8 billion, which would represent changes of -8.49% and +0.65%, respectively, from the prior year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Dollar Tree. These recent revisions tend to reflect the evolving nature of short-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.14% higher. Currently, Dollar Tree is carrying a Zacks Rank of #3 (Hold).

From a valuation perspective, Dollar Tree is currently exchanging hands at a Forward P/E ratio of 13.04. This valuation marks a discount compared to its industry's average Forward P/E of 20.35.

We can additionally observe that DLTR currently boasts a PEG ratio of 2.24. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Retail - Discount Stores industry currently had an average PEG ratio of 2.24 as of yesterday's close.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 58, finds itself in the top 24% echelons of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.


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