Dollar Tree Stock Dips on Downgrade

DLTR has seen a string of bear notes in the past month

Deputy Editor
Aug 9, 2021 at 10:25 AM
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Dollar Tree Inc (NASDAQ:DLTR) stock is down 1.3% to trade at $97.47 at last check, after Deutsche Bank downgraded the stock to "hold" from "buy," with a price-target cut to $102 from $129. This comes after a string of analyst bear notes for DLTR within the past few months, and while this firm believes in the long-term success of the stock, it sees inflation pressure weighing on the discount retailer. 

On the charts, the $102 level has rejected any attempt at a rally during the last two months. Plus, the descending 60-day moving average joined in to reject the stock's most recent shot at a breakout. Year-to-date, the equity sports a 9.1% deficit.

There is still plenty of room for further downgrades. Coming into today, six of the 13 analysts in coverage still carried a "buy" or better rating on Dollar Tree stock, while seven recommended a "hold" or worse. Meanwhile, ahead of today's adjustment, the 12-month consensus price target of $116.10 was a 17.6% premium to current levels.

Elsewhere, shorts have been jumping ship, with short interest down 28.7% during the two most recent reporting periods. The lack of positive price action during this time could indicate a technical weakness in the equity.

Plus, now looks like a good time to weigh in on the security's next move with options. The stock's Schaeffer's Volatility Index (SVI) of 20% stands higher than just 2% of all other readings in its annual range, implying that options players are pricing in relatively low volatility expectations at the moment. 

 

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