JP Morgan reported on Wednesday that they have downgraded
discount retail chain, Family Dollar Stores, Inc.(
) to "Neutral."
Analysts from the firm have downgraded FDO from an "Overweight"
to "Neutral," and have reduced its price target from $75 to $70.
This price target suggests a 7% increase from the stock's current
price of $64.68.
The firm noted, "taking a step back FDO is up 30% over the past
year (significantly outpacing DG/DLTR +12%/-11% and S&P +4.8%)
given new mgmt at the helm (M. Bloom) and operational levers put in
place (re-worked marketing approach, private label, and direct
sourcing penetration). Net/net - we believe in Bloom and FDO's
array of top-line (national brand additions, tobacco) and
bottom-line drivers but believe improvement is largely priced into
the stock at this level (particularly trading at 109 bps premium to
DG/DLTR) with competitive pressures heating up."
Family Dollar shares were mostly flat during premarket trading
Wednesday. The stock is up 12% YTD.
The Bottom Line
Shares of Family Dollar Stores (
) have a 1.30% dividend yield, based on last night's closing stock
price of $61-$62 a share. If the shares can firm up, we see
overhead resistance around the $70 price level.
Family Dollar Stores, Inc.(
) is not recommended at this time, holding a Dividend.com DARS™
Rating of 3.3 out of 5 stars.
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, as well as a detailed explanation of
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