Company Description: Dollar Tree operates $1 stores across the United States and Canada, giving customers an opportunity to purchase various items of merchandise at a substantial discount, albeit of inferior quality. We note that the core brands for the company are Dollar Tree, Family Dollar, and Dollar Tree Canada.

Valuation: Despite tariff pressures and some organizational missteps, we see the PE multiple of 17x on 2020 earnings as justified. When applied to our 2020 EPS estimate of $4.91, we get the target price of $84, which largely supports our Neutral thesis.

Why We Are Neutral: We have the following core six takeaways from the recent earnings report that overall roll up into a fairly balanced story and support our Neutral thesis. We will be watching future earnings very closely to see if our thesis changes into one direction or another.

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