10 Oversold Large Cap Stocks To Buy Now

8. Dollar Tree, Inc. (NASDAQ:DLTR)

Market Cap: $14.6 billion

FWD PE Ratio: 12.65

YTD Share Price Decline: ~53%

Number of Hedge Fund Holders: 38

Dollar Tree, Inc. (NASDAQ:DLTR) operates over 15,000 discount stores under the brands Dollar Tree, Family Dollar, and Dollar Tree Canada. The company primarily targets a broad income range with affordable products, while Family Dollar caters to lower-income customers and offers a variety of essentials. Dollar Tree’s price points range from $1.25 to $5, while Family Dollar’s prices range from $1 to $10.

Dollar Tree (NASDAQ:DLTR) offers consumables like food, health products, and household items, along with seasonal merchandise. Family Dollar serves a broader range of customers, offering general merchandise, including apparel, electronics, and school supplies.

It has been facing challenges in the retail market and has seen a decline in discretionary spending as consumers focus on essentials. Increased competition has also prompted the company to reassess its strategy. In late 2023, Dollar Tree conducted a store portfolio review that resulted in the decision to close around 970 underperforming Family Dollar stores.

On the positive side, the Family Dollar segment saw an improvement in discretionary spending in the second quarter, and lower payroll expenses are expected shortly. For Q3, net sales are forecasted between $7.4 billion and $7.6 billion, with adjusted EPS of $1.05 to $1.15.

For the full year, net sales are expected to reach between $30.6 billion and $30.9 billion, with adjusted EPS between $5.20 and $5.60, down from the previous midpoint of $6.75.

Dollar Tree (NASDAQ:DLTR) has been actively accelerating its new store openings as part of its growth strategy. It is focused not only on opening new stores but also on converting existing ones to newer formats, such as the multi-price store format, which has shown positive performance. Due to this, the company remains confident in its growth potential.