Analyst Note| Zain Akbari, CFA |
Our $95 fair value estimate for no-moat Dollar Tree should not change much despite the announcement that the company will add items above its signature $1 price point at more of its namesake stores. It also raised its share-repurchase authorization by $1.05 billion, to $2.5 billion. Our reaction is considerably more muted than the shares’ midteens percentage jump; we had already expected increasing flexibility in light of recent tests and believe that the long-term competitive dynamic remains challenging. We suggest investors await a more attractive entry point.