Cautious Optimism for Dollar Tree: Hold Rating Amid Execution Risks and Growth Uncertainties
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Simeon Gutman has assigned a Hold rating for Dollar Tree, citing execution risks and growth uncertainties. While the company's multi-price strategy and potential for gross margin expansion offer improvement opportunities, concerns about demand elasticity and inconsistent execution remain. Gutman sees a possible return to a 13%+ EBIT margin but is cautious due to risks like tariff-related pricing and the need for further price increases. The potential upside to the price target is around 18%, but clarity on corporate SG&A levels and labor management is essential for sustained growth.
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