Mantel Ridge took a $1.8 billion stake in Dollar Tree
Dollar Tree Inc (NASDAQ:DLTR) stock is popping ahead of the open, last seen up 6.6% to trade at $121.80, set to open at a fresh record high. This comes after activist investor Mantle Ridge took a $1.8 billion stake in the company, intending to boost the stock's price, focus on pricing strategies, and see Dollar Tree's Family Dollar chain live up to its potential.
In response, at least two analysts have chimed in. Deutsche Bank upgraded DLTR to "buy" from "hold," and hiked its priced target all the way up to $148 from $96, while Evercore ISI raised its price objective to $120 from $100. There's plenty of room for additional upgrades moving forward. Coming into today, 11 of the 16 in coverage still carry a "hold" or worse rating on Dollar Tree stock, while the 12-month consensus price target of $114.09 was a 4.9% discount to Friday's close.
Short interest has been on the rise, up 86.5% in the last two reporting periods, and now represents 3.6% of the stock's available float. In other words, it would take two days to buy back these bearish bets, at DLTR's average pace of trading.
Before today's surge, the $116-$117 area has acted as a ceiling for the security. Support from the 20-day moving average has helped Dollar Tree stock add 16.1% over the last month. Longer term, DLTR sports a 4.7% year-to-date lead.