Evercore ISI analysts increased their price target for Dollar Tree (NASDAQ:DLTR) to $155 from $153 while keeping their In-Line rating.

The analysts noted the initiation of a positive Tactical Trading Call (TAP) on Dollar Tree as the company approaches its March earnings announcement. The expectation is for Dollar Tree to report strong holiday sales, with fourth-quarter earnings per share (EPS) meeting or exceeding Wall Street’s expectations and providing guidance that supports the Street’s $7 2024 estimate and bolsters confidence in achieving the $10+ 2026 goal set last June.

The analysts predict a mid to high single-digit rise in Dollar Tree’s shares, potentially reaching the high $140s to low $150s range, equating to 18-18.5 times 2025 EPS.

A key differentiator for Dollar Tree this earnings season could be its capacity to boost earnings momentum in 2024 through the strategic closure or rebranding of some underperforming Family Dollar stores. Management is expected to convey optimism about transitioning from a 2023 EPS of $5.75 to a 2024 EPS of $7.00, as per Street expectations. This confidence is based on a projected $1.00+ EPS lift from reduced freight and transport costs, and an estimated $0.20-$0.40 annual benefit from store optimization, excluding one-time expenses related to unoccupied property rent.

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