Dollar Tree’s shares rose about 1% in pre-market trading on Tuesday after Jefferies upgraded the discount retailer to Hold from Underperform and raised its price target to $135 from $85.
The upgrade follows a string of positive analyst actions. Raymond James upgraded Dollar Tree to Outperform in early July, while Goldman Sachs exited a Sell rating around the same time. The stock’s recent momentum coincides with improving foot traffic trends, with second-quarter rolling traffic turning positive at 1.4% after a first-quarter decline of 0.8%.
July foot traffic accelerated to 4.5%, the strongest reading in the past nine trailing quarters, according to brokerage data cited by Jefferies. The uptick in customer visits has supported analyst expectations that the company may report earnings per share near the top of its guidance range of $1.00 to $1.15 when it releases second-quarter results before the market opens on August 27.
Dollar Tree also retains a $2.5 billion share repurchase authorization, providing additional support for the stock. The broader U.S. market showed little movement in pre-market trading, with the S&P 500 up 0.04% and the Nasdaq slightly lower.
