The firm set a price target of $57 for the American chain of discount variety stores company, up from its previous mark of $56.
Jefferies also reiterated its "hold" rating and increased the annual EPS earnings estimate for fiscal 2016 to $3.37 from $3.33.
"Field checks suggest a good top-line quarter and likely the best comps in the dollar store space," said analysts at Jefferies. "We believe the company saw strength in both food and non-food and capped up the quarter with good seasonal sales over Halloween."
Shares of Dollar Tree are up 0.55% to $61.85 in early afternoon trading on Wednesday.
Separately, TheStreet Ratings team rates DOLLAR TREE INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate DOLLAR TREE INC (DLTR) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, notable return on equity, increase in stock price during the past year and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 8.4%. Since the same quarter one year prior, revenues slightly increased by 9.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- DOLLAR TREE INC has improved earnings per share by 5.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DOLLAR TREE INC increased its bottom line by earning $2.75 versus $2.70 in the prior year. This year, the market expects an improvement in earnings ($3.05 versus $2.75).
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Multiline Retail industry and the overall market, DOLLAR TREE INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- The current debt-to-equity ratio, 0.52, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that DLTR's debt-to-equity ratio is low, the quick ratio, which is currently 0.60, displays a potential problem in covering short-term cash needs.
- You can view the full analysis from the report here: DLTR Ratings Report