Key Stats for DLTR Stock
- Price change for DLTR stock: 13%
- $DLTR Share Price as of Feb. 13: $126
- 52-Week High: $142
- $DLTR Stock Price Target: $122
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What Happened?
Dollar Tree stock (DLTR) may come under pressure today after BMO Capital Markets cut its rating from market perform to underperform, setting a price target of $95. That target implies a 26% drop from Thursday’s close.
The downgrade comes after Dollar Tree stock surged roughly 73% over the past year, a run BMO analyst Kelly Bania believes has pushed the valuation well beyond what the business can actually deliver.
The core of BMO’s concern is simple: the stock is now trading at around 19 times expected 2026/2027 earnings, and hitting that multiple requires roughly 16% year-over-year earnings growth. Bania doesn’t think Dollar Tree can get there.
In their opinion, two things work against the company.
- First, the company has no meaningful e-commerce presence and little in the way of a digital or retail media strategy.
- Second, Dollar Tree’s margin expansion targets, outlined at its October 2025 Analyst Day, carry real execution risk.
Bania also flagged that much of Dollar Tree’s recent revenue growth stemmed from price increases tied to tariff management. Once that boost fades in 2026, the lack of a digital strategy could become much more visible.
The Q3 earnings transcript backs up some of that concern. Management noted that comparable sales grew 4.2% last quarter, driven almost entirely by higher average ticket. Traffic was actually slightly negative.
That means growth is leaning on customers spending more per visit, not more customers walking through the door.
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What the Market Is Telling Us About DLTR Stock
Dollar Tree stock had a genuinely strong 2025. Comps accelerated, Halloween was a record quarter, and the company shed Family Dollar to refocus on its core brand.
That story made sense to investors, and the stock reflected it.
But BMO’s point is that the stock got ahead of itself. A 19x multiple is a generous price to pay for a retailer that still hasn’t built out a digital infrastructure and is relying heavily on multi-pricing to drive ticket growth rather than traffic growth.
If BMO is right, Dollar Tree stock doesn’t need to do anything obviously wrong for investors to lose money. It just needs to grow at a pace that doesn’t justify the current price.
For long-term investors, the key questions to watch are whether Dollar Tree can reignite traffic growth in 2026 and whether its margin targets survive the one-time tailwinds from tariff-related pricing run their course.
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How Much Upside Does DLTR Stock Have From Here?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
