Truist Lifts Dollar Tree Target, Reaffirms Buy Rating

Core Viewpoint - Truist Securities has raised its price target on Dollar Tree to $149 from $136, maintaining a Buy rating, indicating confidence in the retailer's long-term earnings potential despite current controversies surrounding the stock [1] Group 1: Market Sentiment and Traffic Trends - Dollar Tree is described as a highly debated stock, but Truist remains optimistic heading into 2026 [2] - Concerns from bearish investors regarding a third-quarter traffic slowdown are attributed to temporary factors and in-store disruptions, with expectations for traffic recovery as store standards and inventory improve [2] Group 2: Earnings Growth Potential - Dollar Tree is expected to have significant earnings growth potential over the next several years, supported by operational initiatives such as improved space allocation, enhanced store standards, and accelerated share repurchases [3] - Management has targeted earnings per share (EPS) growth of 12% to 15% annually from 2026 through 2028, while Truist's model predicts EPS growth of 17% in 2026 and 11% in 2027 [3] Group 3: Valuation Outlook - If earnings growth meets targeted levels, the stock's valuation multiple could increase from its current level of approximately 17 times forward earnings [4]