| Big Value and Upside Seen in Dollar Tree | |
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Dollar Tree, Inc. (DLTR) is in the process of integrating with Family Dollar Stores Inc. (FDO) and analysts are getting excited about what to expect from this new dollar-store giant. Wells Fargo’s Matt Nemer and Trisha Dill weighed in on what direction this newly combined company will be headed after it completes its integration. Wells Fargo reiterated an Outperform rating on Dollar Tree based on its view of upside potential to the model related to the Family Dollar merger, and recent external factors (gas prices, foreign exchange) that work in the company’s favor. The investment bank also moved up the valuation range to $91 to $96 from $87 to $95. ALSO READ: The Net Worth of Each Presidential Candidate The investment bank also published its new Dollar Tree estimates of $3.34 and $4.56 for fiscal 2015 and fiscal 2016, respectively. In Wells Fargo’s opinion, Dollar Tree’s shares offer the relative stability of consumer staples exposure, at a lower multiple, with better growth. Also in its report Wells Fargo detailed how diesel prices and China could affect Dollar Tree: Diesel prices are down $0.35 (12%) since Dollar Tree provided guidance in May, which should help offset ongoing freight inflation related to rationalization in the trucking industry, which impacted GM by approximately 30-40 basis points in recent quarters. Over time, the devaluation of the Chinese yuan could also benefit Dollar Tree as Chinese goods become cheaper in U.S. dollars, and Dollar Tree has a more flexible merchandising model than most retailers given its fixed $1 price point and ever-changing discretionary mix (this could benefit comps and /or gross margin). We note DLTR has said approximately 40% of its product comes from outside of the U.S., mostly from China. |
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Wells Fargo est une société d’exploration minière basée aux Etats-Unis D'Amerique. Wells Fargo est cotée aux Etats-Unis D'Amerique. Sa capitalisation boursière aujourd'hui est 269,9 milliards US$ (242,8 milliards €). La valeur de son action a atteint son plus bas niveau récent le 03 juillet 1997 à 10,01 US$, et son plus haut niveau récent le 06 septembre 2024 à 54,00 US$. Wells Fargo possède 4 997 319 680 actions en circulation. |