Dollar Tree 'R.I.B.S. Framework' Turns This Analyst Bullish

Dollar Tree Inc DLTR shares were up by 1.6% to $120.11 at the time of publication on Wednesday, less than a week after the company reported disappointing quarterly results.

The BBQ season is around the corner and fundamentals could accelerate into the back half of the year, according to KeyBanc Capital Markets.

The Dollar Tree Analyst: Bradley Thomas upgraded the rating for Dollar Tree from Sector Weight to Overweight, while establishing a price target of $150.

The Dollar Tree Thesis: While the "R.I.B.S." framework suggests the company's fundamentals could accelerate and the Family Dollar banner needs to either turnaround or be divested over the next two to three years, Thomas said in the upgrade note.

Check out other analyst stock ratings.

The analyst detailed the R.I.B.S. framework as:

• R is for Rationalization: The Rationalization of stores in the sector could benefit comps and profitability for both Dollar Tree and Family Dollar.
• I is for Inflation: Inflation could moderate and "ease headwinds on the consumer and the industry."
• B is for Breaking the Buck: This still presents a "multi-year opportunity for the Dollar Tree banner."
• S is for Shareholders: Their frustration could spur the sale or divestiture of Family Dollar, "which we believe would prove accretive if implemented."

Now Read: 8 Analysts Size Up Amazon’s Q1 Results, AWS Opportunity: ‘Likely The Biggest Winner In AI’

Image by Jonathan Weiss via Shutterstock