Dollar Tree (NASDAQ:DLTR) Reaches New 52-Week High - Should You Buy?

Key Points

• Dollar Tree reached a new 52-week high, trading at $116.50, with analysts predicting an average target price of $97.74 for the stock.
• The company plans to repurchase up to $2.5 billion worth of its shares, indicating that the board believes the shares are currently undervalued.
• Recent earnings results showed a positive performance, with a reported earnings per share of $1.26, exceeding analysts' expectations and reflecting an 11.3% year-over-year revenue increase.

Dollar Tree, Inc. (NASDAQ:DLTR - Get Free Report) reached a new 52-week high during trading on Monday . The stock traded as high as $116.50 and last traded at $114.85, with a volume of 187950 shares trading hands. The stock had previously closed at $114.72.

Wall Street Analyst Weigh In

DLTR has been the subject of several recent research reports. Evercore ISI raised their price objective on shares of Dollar Tree from $92.00 to $94.00 and gave the company an "in-line" rating in a research note on Tuesday, June 24th. Sanford C. Bernstein set a $82.00 price objective on shares of Dollar Tree and gave the company a "market perform" rating in a research note on Monday, May 5th. The Goldman Sachs Group lowered shares of Dollar Tree from a "strong-buy" rating to a "strong sell" rating in a research note on Thursday, June 5th. Guggenheim reissued a "buy" rating and issued a $100.00 price objective on shares of Dollar Tree in a research note on Thursday, June 5th. Finally, Wells Fargo & Company raised their price objective on shares of Dollar Tree from $105.00 to $130.00 and gave the company an "overweight" rating in a research note on Tuesday, July 22nd. Two equities research analysts have rated the stock with a sell rating, thirteen have assigned a hold rating and seven have issued a buy rating to the company's stock. Based on data from MarketBeat.com, the stock presently has an average rating of "Hold" and an average target price of $97.74.

Dollar Tree Stock Up 1.1%

The firm has a market cap of $24.40 billion, a PE ratio of -8.43, a P/E/G ratio of 2.48 and a beta of 0.88. The company has a debt-to-equity ratio of 0.62, a quick ratio of 0.72 and a current ratio of 1.04. The firm's 50-day moving average price is $103.03 and its two-hundred day moving average price is $85.04.

Dollar Tree (NASDAQ:DLTR - Get Free Report) last released its quarterly earnings results on Wednesday, June 4th. The company reported $1.26 EPS for the quarter, beating the consensus estimate of $1.21 by $0.05. Dollar Tree had a negative net margin of 12.15% and a positive return on equity of 19.36%. The firm had revenue of $4.64 billion during the quarter, compared to the consensus estimate of $4.52 billion. During the same quarter in the prior year, the firm earned $1.43 EPS. Dollar Tree's revenue for the quarter was up 11.3% on a year-over-year basis. As a group, equities research analysts expect that Dollar Tree, Inc. will post 5.39 EPS for the current fiscal year.

Dollar Tree announced that its board has approved a stock repurchase plan on Wednesday, July 9th that allows the company to repurchase $2.50 billion in shares. This repurchase authorization allows the company to reacquire up to 11.5% of its stock through open market purchases. Stock repurchase plans are generally an indication that the company's board of directors believes its shares are undervalued.

Insider Buying and Selling

In related news, CMO Richard L. Mcneely sold 21,026 shares of the company's stock in a transaction on Friday, June 6th. The shares were sold at an average price of $94.62, for a total value of $1,989,480.12. Following the completion of the sale, the chief marketing officer owned 50,419 shares in the company, valued at $4,770,645.78. This represents a 29.43% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. 6.60% of the stock is currently owned by company insiders.

Hedge Funds Weigh In On Dollar Tree

Large investors have recently bought and sold shares of the company. Forum Financial Management LP purchased a new position in Dollar Tree during the 4th quarter worth $340,000. Wealth Enhancement Advisory Services LLC raised its position in Dollar Tree by 50.7% during the 1st quarter. Wealth Enhancement Advisory Services LLC now owns 13,724 shares of the company's stock worth $1,030,000 after buying an additional 4,619 shares during the last quarter. McGinn Penninger Investment Management Inc. raised its position in Dollar Tree by 13.2% during the 1st quarter. McGinn Penninger Investment Management Inc. now owns 68,585 shares of the company's stock worth $5,149,000 after buying an additional 8,015 shares during the last quarter. Bastion Asset Management Inc. purchased a new position in Dollar Tree during the 1st quarter worth $3,585,000. Finally, State of Wyoming purchased a new position in Dollar Tree during the 4th quarter worth $316,000. Hedge funds and other institutional investors own 97.40% of the company's stock.

About Dollar Tree

Dollar Tree, Inc operates retail discount stores. The company operates in two segments, Dollar Tree and Family Dollar. The Dollar Tree segment offers merchandise at the fixed price of $ 1.25. It provides consumable merchandise, which includes everyday consumables, such as household paper and chemicals, food, candy, health, personal care products, and frozen and refrigerated food; variety merchandise comprising toys, durable housewares, gifts, stationery, party goods, greeting cards, softlines, arts and crafts supplies, and other items; and seasonal goods that include Christmas, Easter, Halloween, and Valentine's Day merchandise.