Dollar Tree (DLTR) Stumbles Despite Positive Market Indicators

Tumbling to a price of $152.61 during today's afternoon trading session, shares of Dollar Tree are now -8.37% below their average target price of $166.55. Does this mean the stock will reverse course? Analysts are giving DLTR an average rating of buy and target prices ranging from 110 to 195 dollars per share.

The market seems to share this optimistic view, since Dollar Tree has a short interest of only 3.7% (this is the percentage of the share float that is being shorted). Each short position represents an investor's expectation that the price of the stock will decrease in the future.

Another way to gauge the sentiment on Dollar Tree is to look at the percentage of institutions that are invested in the stock. In this case, 100.0% of the shares are held by pension, mutual, and hedge funds, which shows that these institutions probably have strong confidence in the stock.

To sum up, Dollar Tree is probably the subject of mostly positive market sentiment because of an analyst consensus of some upside potential, a buy rating, an average amount of shares sold short, and a significant number of institutional investors. At Market Inference, we believe that any investment decision should be preceded by an in-depth analysis of the company's fundamental values and a comparison with similar stocks.

Here's a snapshot of some important facts to keep in mind about DLTR:

  • The stock has trailing 12 month earnings per share (Eps) of $6.93

  • Dollar Tree has a trailing 12 month Price to Earnings (P/E) ratio of 22.0 compared to the S&P 500 average of 15.97

  • The company has a Price to Book (P/B) ratio of 4.1 in contrast to the S&P 500's average ratio of 2.95

  • Dollar Tree is a Consumer Defensive company, and the sector average P/E and P/B ratios are 24.21 and 4.09 respectively

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.