Overview

• Citi upgraded Dollar Tree's stock from 'Neutral' to 'Buy,' increasing the price target from $76 to $103, reflecting a 43% increase.
• Analysts view the high-tariff environment, which impacts 50% of Dollar Tree's products, as a strategic opportunity for pricing adjustments.
• Dollar Tree's past pricing shifts, including moving away from the $1 base price, have demonstrated adaptability and driven comparable store sales growth of 9% in 2022 and 6% in 2023.
• Citi predicts Dollar Tree may further raise its base price from $1.25 to $1.50 or $1.75, leveraging its value-driven reputation to maintain customer loyalty.
• At its current trading price of $72, Dollar Tree's stock is seen as significantly undervalued, with Citi's target suggesting over 52% potential upside.