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Dollar Tree (DLTR) Rises But Trails Market: What Investors Should Know

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Dollar Tree (DLTR - Free Report) ended the recent trading session at $107.12, demonstrating a +0.53% swing from the preceding day's closing price. The stock trailed the S&P 500, which registered a daily gain of 1.08%. At the same time, the Dow added 0.32%, and the tech-heavy Nasdaq gained 1.58%.

Shares of the discount retailer witnessed a loss of 0.29% over the previous month, beating the performance of the Retail-Wholesale sector with its loss of 0.31% and underperforming the S&P 500's gain of 0.43%.

Market participants will be closely following the financial results of Dollar Tree in its upcoming release. The company is predicted to post an EPS of $1.06, indicating a 16.48% growth compared to the equivalent quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $7.52 billion, up 2.59% from the year-ago period.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $6.61 per share and a revenue of $31.29 billion, signifying shifts of +12.22% and +2.23%, respectively, from the last year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Dollar Tree. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.3% lower. Dollar Tree presently features a Zacks Rank of #4 (Sell).

In terms of valuation, Dollar Tree is currently trading at a Forward P/E ratio of 16.12. This represents a discount compared to its industry's average Forward P/E of 21.4.

We can also see that DLTR currently has a PEG ratio of 1.15. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. Retail - Discount Stores stocks are, on average, holding a PEG ratio of 2.41 based on yesterday's closing prices.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 57, which puts it in the top 23% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.


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