DLTR

Dollar Tree Inc

Consumer


Presented:03/30/2023
Price:$140.81
Cap:$31.15B
Current Price:$67.73
Cap:$14.56B

Presented

Date03/30/2023
Price$140.81
Market Cap$31.15B
Ent Value$42.85B
P/E Ratio19.55x
Book Value$39.56
Div Yield0%
Shares O/S221.23M
Ave Daily Vol2,303,139
Short Int3.46%

Current

Price$67.73
Market Cap$14.56B
Dollar Tree, Inc. owns and operates discount variety stores offering merchandise at fixed prices. It operates through the Dollar Tree and Family Dollar segments. The Dollar Tree segment includes operations under Dollar Tree and Dollar Tree Canada brands, with its distribution centers in the United States and Canada. The Family Dollar segment consists of a chain of general merchandise retail discount stores providing consumers with a selection of competitively priced merchandise in convenient neighborhood stores. The company was founded by J. Douglas Perry and Macon F. Brock, Jr. in 1953 and is headquartered in Chesapeake, VA.

Publicly traded companies mentioned herein: Dollar General Corp (DG), Dollar Tree Inc (DLTR), Walmart Inc (WMT)

Highlights

The presenter is long shares of Dollar Tree Inc (DLTR), which has been an activist name over the last year with Mantle Ridge making changes to the management team and board. Investors were open to Mantle Ridge’s changes due to their frustration with the existing management team’s inability to integrate and capture synergies from the 2015 acquisition of Family Dollar (FDO). Incremental issues (investment in price, wage growth, freight recapture uncertainty, supply chain delays) have caused consensus EPS estimates for the FY2024 (ends January 2024) to fall from $9.08 to the current $6.62, putting pressure on the stock. However, the presenter has confidence in the new management team and expects DLTR to provide a 2- to 3-year roadmap to $11 of EPS when it hosts its Investor Day in June. Underwriting a reasonable 18x multiple on that $11 earnings figure creates a $198 price target compared to the current $141 share price.

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Idea Discussion

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