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

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In the latest trading session, Dollar Tree (DLTR - Free Report) closed at $72.48, marking a +1.88% move from the previous day. This move outpaced the S&P 500's daily loss of 0.29%. Elsewhere, the Dow saw a downswing of 0.32%, while the tech-heavy Nasdaq depreciated by 0.5%.

The discount retailer's stock has dropped by 6.63% in the past month, falling short of the Retail-Wholesale sector's gain of 3.53% and the S&P 500's gain of 2.52%.

The upcoming earnings release of Dollar Tree will be of great interest to investors. In that report, analysts expect Dollar Tree to post earnings of $2.18 per share. This would mark a year-over-year decline of 14.51%. At the same time, our most recent consensus estimate is projecting a revenue of $8.24 billion, reflecting a 4.61% fall from the equivalent quarter last year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $5.39 per share and revenue of $30.8 billion. These totals would mark changes of -8.49% and +0.65%, respectively, from last year.

Investors should also pay attention to any latest changes in analyst estimates for Dollar Tree. These revisions help to show the ever-changing nature of near-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. 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, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Dollar Tree is currently a Zacks Rank #3 (Hold).

Investors should also note Dollar Tree's current valuation metrics, including its Forward P/E ratio of 13.19. This valuation marks a discount compared to its industry's average Forward P/E of 20.6.

We can also see that DLTR currently has a PEG ratio of 2.26. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Retail - Discount Stores industry currently had an average PEG ratio of 2.26 as of yesterday's close.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 28, placing it within the top 12% of over 250 industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.


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