NEW YORK (TheStreet) -- DollarTree's (DLTR) - Get Dollar Tree, Inc. Report price target was lowered to $90 from $95 by analysts at Cantor Fitzgerald this morning as the firm maintains its "buy" rating.
The price target change was due to analysts' discounted cash flow (DCF) model, the firm said.
Overall, analysts are bullish as they "continue to think the synergies that will likely be realized with the Family DollarStores (FDO) acquisition are not fully reflected in the stock's current valuation," analysts noted.
Additionally, this action comes after the discount retailer posted its second quarter fiscal 2015 earnings results Tuesday. Revenue missed while earnings beat analysts' estimates.
For the second quarter ended August 1, the company posted earnings of 67 cents per share on revenue of $3.01 billion.
Analysts were expecting the company to report earnings of 62 cents a share on revenue of $3.04 billion.
In the same quarter the previous year, the company posted earnings of 61 cents per share on revenue of $2.03 billion.
Shares are slumping 4.03% to $66.86 in Wednesday's early morning trading session.
Separately, TheStreet Ratings team rates DOLLAR TREE INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate DOLLAR TREE INC (DLTR) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- DLTR's revenue growth has slightly outpaced the industry average of 6.0%. Since the same quarter one year prior, revenues slightly increased by 8.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Compared to its closing price of one year ago, DLTR's share price has jumped by 43.37%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- DOLLAR TREE INC's earnings per share declined by 49.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, DOLLAR TREE INC increased its bottom line by earning $2.90 versus $2.75 in the prior year. This year, the market expects an improvement in earnings ($3.39 versus $2.90).
- 36.83% is the gross profit margin for DOLLAR TREE INC which we consider to be strong. Regardless of DLTR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 3.19% trails the industry average.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the Multiline Retail industry and the overall market, DOLLAR TREE INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- You can view the full analysis from the report here: DLTR Ratings Report