BMO Capital Markets downgraded Dollar Tree to Underperform from Market Perform, citing concerns about the retailer's digital strategy and margin expansion risks. The brokerage cut its price target to $95 from a prior level, arguing that Dollar Tree lacks sufficient investment in e-commerce, digital tools, and retail media.

BMO noted that competitors are leveraging these channels to drive faster sales growth and higher margins, while Dollar Tree remains heavily reliant on its multi-price $3 to $5 food and consumables offering to support comparable sales growth of 3% to 4%. The firm warned that this reliance could become more exposed in 2026 once the recent boost from tariff-related price increases fades.

The brokerage also flagged potential 'dis-synergies' following the separation of the Dollar Tree and Family Dollar banners. While Dollar Tree plans to remove nearly $200 million in corporate overhead costs over two years, BMO noted that earlier disclosures pointed to roughly $450 million in deal synergies in 2018, with up to $200 million tied directly to the Dollar Tree banner, including procurement savings that could affect gross margins.