WMT - Goldman Sachs On Top Retail Picks Amid Consumer Financial Concerns: Dollar Tree Ollie's Bargain And More | Benzinga
Goldman Sachs analyst Kate McShane has recently highlighted a drop in investor confidence regarding various retail firms.
This change is linked to concerns about consumers' overall financial health, with the resumption of student loan payments and increasing gas prices being the contributing factors.
In contrast, Goldman Sachs maintains a positive outlook based on a strong labor market.
In this mixed landscape, McShane has concentrated on four significant retail giants, examining how these broader trends have impacted their stocks.
Dollar Tree, Inc. (NASDAQ: DLTR): McShane upgraded Dollar Tree to Buy from Neutral, lowering the price target to $137 from $150.
The analyst upgraded the stock, citing solid earnings growth potential supported by improving traffic trends with sticky new customers, a discretionary cash flow outlook for lower and middle-income consumers in 2024, and better shopability/in-stocks after recent investments.
The analyst thinks lower freight costs should become a meaningful tailwind for DLTR in 2H23.
Dollar Tree's multi-year turnaround efforts should generate an EPS CAGR of +19% through FY26, well above most broadline/dollar store peers, notes ...