Key Stats for Dollar Tree Stock
- Past-Week Performance: 7%
- 52-Week Range: $62 to $142
- Current Price: $135
What Happened to Dollar Tree Stock?
Dollar Tree (DLTR) stock closed at $134.51 on February 20, up 64% for full-year 2025, but slipped 1.5% premarket on February 14 after BMO downgraded the stock to “Underperform” and slashed its price target to $95 from $110, citing a weak digital strategy and unaddressed dis-synergies threatening margin expansion.
BMO’s downgrade landed as Dollar Tree was still digesting a leadership reshuffling, with Chief Merchandising Officer Richard McNeely stepping down and Brent Beebe assuming the role on February 1, alongside the January 13 appointment of Daniel Delrosario as SVP of Investor Relations and Treasurer.
Underlying these management changes, Dollar Tree’s Q3 fiscal 2025 earnings delivered a genuine beat, with comparable sales growing 4.2%, adjusted EPS climbing 12% to $1.21, net sales rising 9.4% to $4.7 billion, and Halloween generating an all-time record of over $200 million driven by its expanding multi-price assortment.
Despite the BMO downgrade, the bull case centers on Dollar Tree’s multi-price strategy, which now generates 3.5x more profit per unit than standard items and powered gross margin expansion of 40 basis points to 35.8% in Q3, with management guiding for 12% to 15% adjusted EPS CAGR through 2028.
CEO Michael Creedon stated on the Q3 fiscal 2025 earnings call that “this was the start of a new era for Dollar Tree, one company, one brand, one focus,” grounding that statement in 3 million net new households joining in Q3, with 60% earning over $100,000 annually.
Still, the bear case carries weight as traffic turned slightly negative in Q3, and BMO’s $95 target implies 26% downside from the stock’s last close at the time of the downgrade, with 7 of 28 analysts now rating DLTR a sell against a median price target of $124.50.
Longer term, Dollar Tree faces a sharpening competitive threat from Aldi, which announced plans on January 12 to open more than 180 U.S. stores in 2026 as part of a five-year $9 billion expansion, directly targeting the value-seeking shoppers that Dollar Tree is counting on to sustain its multi-price momentum.
Wall Street’s Take on DLTR Stock
Despite the BMO downgrade and leadership transition, Dollar Tree’s post-Family Dollar focus has fundamentally reset its earnings trajectory, and the Q3 beat alongside a raised full-year EPS outlook of $5.60 to $5.80 suggests the pure-play transformation is already delivering measurable results.
The fundamental case rests on margin recovery, with EBITDA margins expected to expand from 7.1% in fiscal 2025 to 11.9% in fiscal 2026 as re-stickering costs disappear, SG&A leverage kicks in, and management targets 12% to 15% adjusted EPS CAGR through fiscal 2028.
Wall Street remains cautiously constructive, with 9 analysts rating DLTR a Buy or Outperform against 12 Holds as of February 20, and the mean price target sitting at $125.30 against a current price of $134.51, implying the stock has already outrun near-term consensus.
The target spread tells a more divided story, ranging from a $75 floor to a $165 ceiling across 23 estimates, reflecting genuine disagreement on how fast multi-price penetration and SG&A discipline can offset the structural revenue headwind from the Family Dollar divestiture.
What Does the Valuation Model Say?
Even accounting for the BMO-flagged risks around digital strategy and dis-synergies, a mid-case valuation model prices DLTR at $157.41, implying a 17% total return by January 2030 at an annualized IRR of just 4.1%, a relatively modest reward given the execution risk still embedded in the story.
The core risk is that revenue contracts sharply in fiscal 2026, with estimates pointing to a 37% YoY decline to $19.4 billion as the Family Dollar TSA income fades, leaving EBITDA margin expansion as the sole driver of EPS growth with very little room for a traffic miss or tariff escalation.
At $134.51, DLTR stock looks fairly valued to slightly stretched relative to both the $125.30 mean analyst target and the modest 4.1% annualized model return, making it a wait-and-see story until Q4 earnings in March confirm whether the multi-price momentum can sustain comps through a tougher macro backdrop.
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