Dollar Tree offers a selection of everyday basic products as well as seasonal, closeout and promotional merchandise in locations across the U.S. and Canada. The company was founded in 1986 and is based in Chesapeake, Virginia.
DLTR Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Dollar Tree Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Dollar Tree Inc ranked in the 61th percentile in terms of potential gain offered. Moreover, under all the scenarios we modelled, the output consistently forecasted positive returns. The most interesting components of our discounted cash flow analysis for Dollar Tree Inc ended up being:
Dollar Tree Inc's weighted average cost of capital (WACC) is 8%; for context, that number is higher than merely 7.95% of tickers in our DCF set.
DLTR's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 3%; for context, that number is higher than merely 7.95% of tickers in our DCF set.
As a business, Dollar Tree Inc experienced a tax rate of about 19% over the past twelve months; relative to its sector (Consumer Defensive), this tax rate is higher than 77.07% of stocks generating free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
VGR, KHC, MO, ABEV, and VLGEA can be thought of as valuation peers to DLTR, in the sense that they are in the Consumer Defensive sector and have a similar price forecast based on DCF valuation.
The retailer sector is not suffering from any post-holiday hangover with solid gains across the sector.In an interesting reveal, Gordon Haskett analyst Chuck Grom points to accelerating growth in average basket sizes for consumers in January compared to December. Retailer with the biggest jumps in basket size include Dollar Tree...
Moody's rating action reflects a base expected loss of 12.7% of the current pooled balance, compared to 6.4% at Moody's last review. The principal methodology used in rating all classes except interest-only classes was "Approach to Rating US and Canadian Conduit/Fusion CMBS" published in September 2020 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBS_1244778.
Department stores like Sears, JCPenney, Lord & Taylor and others have either gone under or closed hundreds of stores, threatening to take down shopping malls where they once served as anchor tenants — but dollar stores are booming. Could rapidly growing Dollar General, Dollar Tree and other discount stores become the new anchor tenants for […]