DCF Studio

    DLTR · NMS · Consumer Defensive

    Dollar Tree, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 140.39

    Market price

    USD 138.60

    Implied upside

    +1.3%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2026-01-31

    AdjustedCapital expenditure runs at 6.1% of revenue against depreciation of 2.8%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD 140.39+1.3%
    Exit multiple
    USD 171.40+23.7%
    Market price
    USD 138.60

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn2bnFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36
    Nominal FCFFDiscounted to todayUSD
    LineFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36CAGR
    RevenueUSD 20.7bnUSD 21.9bnUSD 23.2bnUSD 24.4bnUSD 25.5bnUSD 26.6bnUSD 27.6bnUSD 28.6bnUSD 29.4bnUSD 30.1bn+4.3%
    EBITUSD 2.1bnUSD 2.3bnUSD 2.4bnUSD 2.5bnUSD 2.6bnUSD 2.7bnUSD 2.8bnUSD 2.9bnUSD 3.0bnUSD 3.1bn+4.3%
    NOPATUSD 1.7bnUSD 1.8bnUSD 1.9bnUSD 2.0bnUSD 2.1bnUSD 2.2bnUSD 2.2bnUSD 2.3bnUSD 2.4bnUSD 2.4bn+4.3%
    Add depreciation & amortisationUSD 573.7mUSD 608.4mUSD 642.5mUSD 675.7mUSD 707.6mUSD 737.9mUSD 766.1mUSD 792.1mUSD 815.4mUSD 835.8m+4.3%
    Less capital expenditureUSD -1.3bnUSD -1.3bnUSD -1.3bnUSD -1.3bnUSD -1.3bnUSD -1.3bnUSD -1.3bnUSD -1.3bnUSD -1.3bnUSD -1.3bn-0.1%
    Capex, % of revenue6.1%5.9%5.7%5.5%5.3%5.0%4.8%4.6%4.4%4.2%-
    Less increase in working capitalUSD 543.4mUSD 533.4mUSD 524.2mUSD 509.8mUSD 490.0mUSD 464.9mUSD 434.4mUSD 398.8mUSD 358.3mUSD 313.2m+5.9%
    Free cashflow to firmUSD 1.5bnUSD 1.6bnUSD 1.7bnUSD 1.8bnUSD 1.9bnUSD 2.0bnUSD 2.1bnUSD 2.2bnUSD 2.3bnUSD 2.3bn+4.9%
    Discount factor0.96510.89890.83720.77970.72620.67640.63000.58680.54650.5090-
    Present valueUSD 1.5bnUSD 1.5bnUSD 1.4bnUSD 1.4bnUSD 1.4bnUSD 1.4bnUSD 1.3bnUSD 1.3bnUSD 1.2bnUSD 1.2bn-
    Present Value Of The ForecastUSD 13.6bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.789Reported 0.685, pulled toward 1.0 (Blume)
    Cost of equity8.23%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 19.3x interest cover. Book interest / average debt was lower, at 1.1%.
    Market capitalisationUSD 26.0bn78.7% of capital
    Total debtUSD 7.1bn21.3% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC7.37%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 140.39

    61% of EV

    Forecast FCFF, final year
    USD 2.3bn
    Capex at depreciation, working capital in reinvestment
    USD 2.4bn
    Less reinvestment at g/ROIC (17.1% of NOPAT)
    USD -418.0m
    Capitalised
    USD 2.0bn
    ROIC (reported)
    14.6%
    Terminal value, undiscounted
    USD 42.6bn
    Terminal value, discounted
    USD 21.7bn
    Enterprise value
    USD 35.3bn
    Less net debt
    USD 6.3bn
    Equity value
    USD 29.0bn

    Exit at 14.1x EBITDA

    Value per shareUSD 171.40

    67% of EV

    Terminal value, undiscounted
    USD 55.2bn
    Terminal value, discounted
    USD 28.1bn
    Enterprise value
    USD 41.7bn
    Less net debt
    USD 6.3bn
    Equity value
    USD 35.4bn

    Spread between methods: 20%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.37%213.82231.20255.02289.33342.59
    6.37%163.95172.25182.95197.13216.60
    7.37%131.04135.19140.39146.99155.54
    8.37%107.69109.73112.25115.42119.42
    9.37%90.2691.1392.2593.6895.49

    Outlined: this model. Green text: above today's price of 138.60. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year8.0%4.5%4.4%
    EBIT margin13.6%10.3%10.1%
    Discount rate-7.4%7.4%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.