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Dollar Tree (DLTR) Rises While the Market Falls: Some Facts to Consider

Dollar Tree (DLTR) ended the most recent trading day at $106.77, reflecting a change of +1.48% from the end of the previous session. The stock outperformed the S&P 500, which saw a daily loss of 0.41%. The Dow, meanwhile, saw a decline of 0.12%, and the tech-dominated Nasdaq saw a decline of 0.71%.

Heading into today, the discount retailer’s shares had lost 8.35% over the past month, lagging the Retail-Wholesale sector’s gain of 2.65% and the S&P 500’s gain of 3.53% during that time.

Market participants will be closely monitoring Dollar Tree’s financial results in the upcoming release. The company’s earnings per share (EPS) is estimated at $1.07, up 17.58% from the same quarter last year. Meanwhile, the latest consensus estimate is for revenue of $7.51 billion, up 2.59% from the same quarter last year.

DLTR’s full-year Zacks Consensus Estimates are calling for earnings of $6.66 per share and revenue of $31.28 billion. These results would represent year-over-year changes of +13.07% and +2.2%, respectively.

It is also important for investors to be aware of any recent changes in analyst estimates for Dollar Tree. These revisions help to demonstrate the ever-changing nature of near-term business trends. Therefore, positive estimate changes convey analysts’ confidence in the company’s business performance and earnings potential.

Our research shows that these estimate revisions are directly related to future stock price performance. To capitalize on this, we have developed the Zacks Rank, an exclusive model that takes these estimate changes into account and provides an operating rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell) and has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 3.16% lower. Dollar Tree currently carries a Zacks Rank of #4 (Sell).

Valuation is also important, so investors should note that Dollar Tree currently has a P/E ratio of 15.8, which represents a discount to the industry’s average P/E ratio of 21.27.

Investors should also note that DLTR currently has a PEG ratio of 1.13. The PEG ratio is similar to the commonly used P/E ratio, but this parameter also includes the company’s expected earnings growth curve. At the end of yesterday’s trading session, the Retail – Discount Stores industry had an average PEG ratio of 2.56.

The Retail – Discount Stores industry is part of the Retail and Wholesale Trade sector. This group has a Zacks Industry Rank of 157, putting it in the bottom 38% of all 250+ industries.

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

Remember to use to track these and other metrics on stock movement during the coming trading sessions.

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