On paper, Dollar Tree (DLTR) should thrive under the current economic malaise. Due to everyday consumers being under significant pressure, discount specialists tend to benefit from the trade down effect — the concept that shoppers will trade for lower quality in exchange for a lower price. Frankly, it doesn’t get much lower in the price scale than Dollar Tree, which theoretically makes DLTR stock appealing.
However, this narrative really hasn’t panned out. On a year-to-date basis, DLTR stock is down nearly 14%. Since closing at a multi-year peak in mid-January of this year, the security has shed 25% of value. Unsurprisingly, DLTR has incurred a 40% Sell rating from the Barchart Technical Opinion indicator, reflecting the ticker falling below key moving averages.
