Morgan Stanley Maintains Neutral on Dollar Tree (DLTR)

Morgan Stanley is out with its report today on Dollar Tree DLTR, maintaining Neutral. In a note to clients, Morgan Stanley writes, "DLTR has rallied ~25% since its 1Q EPS report and sentiment has swung from negative to positive. DLTR's multiple has expanded to 16x from 13x as the market seems more comfortable that the retailer can post strong comps despite rising gas prices and a seasonally weaker 4Q result. With the P/E multiple towards the upper end of its 3-year range, we believe future stock performance will hinge on estimate revisions. We are still positively inclined into the quarter as we see upside to 1Q estimates; however, the risk/reward on the event is now more neutral due to higher valuation and increased market expectations." At the time of posting, shares of DLTR were trading pre-market at $61.55, up 0.05% from Thursday's close.