Citi Highlights Dollar Tree as a Potential Beneficiary in the Global Trade War

Citi analyst Paul Lejuez has identified discount retailer Dollar Tree as a potential “dark horse winner” in the ongoing global trade war, upgrading the stock to a “Buy” from “Neutral.”

He also raised his price target for Dollar Tree shares from $76 to $103, indicating a potential upside of over 50%. This comes amidst widespread investor concern regarding the economic impacts of President Donald Trump’s trade policies, including a 10% tariff that took effect last Saturday and more measures scheduled for this week.

Despite a significant portion of Dollar Tree’s products facing higher tariffs—approximately 50%—Lejuez sees the company’s value proposition thriving in the current climate. He notes that while the market initially reacted negatively to the tariff situation, the retailer’s ability to adapt to higher prices could work to its advantage. Dollar Tree has already been gradually increasing its price points as part of its Dollar Tree Plus and Multi-price 3.0 initiatives, introducing products priced from $2 to $5. Lejuez believes a modest price increase to around $1.50 or $1.75 per item won’t shock customers, particularly as Dollar Tree has a long track record of successfully adjusting its pricing strategy to market conditions.

In fact, Dollar Tree has posted positive same-store sales every year since 2005, even during times of economic difficulty such as the 2008-2009 recession and the 2020-2021 pandemic period. Lejuez argues that in the face of higher tariffs, Dollar Tree’s focus on value and affordability will continue to resonate with consumers looking for budget-friendly options during uncertain economic times.

The discount retailer’s shares saw a slight uptick in premarket trading following the upgrade, diverging from the broader market trend of losses. However, Dollar Tree’s stock has still experienced a roughly 10% decline year-to-date. Lejuez’s analysis contrasts with the broader economic outlook, which is dominated by concerns about rising tariffs and their effects on global growth.

With input from CNBC and Bloomberg.