Analyst: Dollar Tree Stock Trading at Full Valuation

The firm did hike its price target on DLTR though

Assistant Editor
Nov 30, 2021 at 10:04 AM
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The shares of Dollar Tree Inc (NASDAQ:DLTR) are moving with the broader market today, last seen down 2.9% to trade at $137.57. This comes after Goldman Sachs downgraded the equity to "neutral" from "buy," with the analyst stating that the shares are trading at their full valuation and the company's comeback story is already priced in. Goldman Sachs did, however, hike its price target to $150 from $116.

This negative analyst attention comes a few weeks after bull notes poured in for DLTR following a big stake from activist investor Mantle Ridge. After hitting annual lows in mid September, Dollar Tree stock was guided higher by the 10-day moving average, and rode a post-earnings bull gap to an all-time high of $149.37 on Nov. 24. Longer term, DLTR sports a 30.8% year-to-date lead.

Options traders are quite enamored with puts, nonetheless. Dollar Tree stock's Schaeffer's put/call open interest ratio (SOIR) of 1.04 sits in the 98th percentile of its annual range, indicating that near-term traders have rarely been more put-biased in the past 12 months.

Echoing this, Dollar Tree stock sports a 10-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) that ranks in the 79th percentile of its annual range. This implies the rate of put buying relative to call buying has been quicker than usual. 

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