Jeffries thinks it’s time to leave the dollar tree behind. The bank downgraded discount retailer stocks to poor performance while pending. Analyst Corey Tarlowe also reduced his price target from $110 to $70, showing a 20% drop since the end of Monday. Tarlowe emphasized that the current risk/reward balance appears undesirable towards Dollar Tree’s upcoming investor day. Specifically, analysts cited “operational complexity” as a major headwind for stocks. “Once-simple businesses face difficult-to-manage structural changes and operational complexity. Macro headwinds, rising competition, and margin pressures further increase risk. “This event was launched during a period of stronger business momentum, but with recent data softening, MGMT becomes vulnerable to questions about NT performance.” Meanwhile, the company’s transition to items categorized into the $5-$7 range introduced complexity in stores and customers, reducing the consumer experience by “eroding simplicity.” Tarlowe noted that traffic is slowing while per-travel spending is becoming negative. Dollar Trees also flatter over their peers, and their price increases no longer offer a specific competitive advantage. Competitors also beat Dollar Tree when it comes to proximity to stores across the country. “DG is strengthening its value proposition by expanding its $1 assortment to 2,000 Skus and deploying fresh produce in more than 5,400 stores, but Walmart leverages scale and omnichannel, and growth of less than five will accelerate growth with a treasure trove hunt model,” says Tarlowe. “DLTR differentiation is eroding and multiprice strategies are exposed.” DLTR YTD MOUNTANE DLTR YTD CHART DOLLAR TREE shares rose 17% this year. However, they fell 4% after the downgrade. Analysts will be split into stocks. Of the 28 people who cover it, each LSEG rate it as a buy or strong buy. However, another 15 cited pending ratings, while the other two rated them as poorly performing. (Learn the best 2026 strategies from within NYSE with Josh Brown and others on CNBC Pro Live. Tickets and info here.)
