Dollar Tree: two upgrades, split conviction
Dollar Tree drew upgrades from both Raymond James and Goldman Sachs, and shares rose in early trading. Raymond James took the more bullish stance with an outperform rating and a $140 price target, arguing management's 2026 outlook looks conservative and understates potential tailwinds. Three of those tailwinds: tariff refunds, lower fuel costs, and additional share buybacks. Dollar Tree has already received roughly $110 million in tariff refunds, with several hundred million more possible during fiscal 2026. Fuel costs have been declining recently despite an uptick in oil prices today, and that decline should help the company. Raymond James sees operational execution improving as cost pressures ease, and expects more customer traffic later this year. The second half of the year is where it matters.
Goldman took the cautious side, staying neutral and keeping a sell rating while raising its price target to $125, close to where the stock trades now. Goldman agrees consumer perceptions of Dollar Tree's value and pricing have improved from earlier this year, but views that recovery as already priced in and the stock as fully valued. It also acknowledges store traffic, though running below historic levels, still holds core shoppers to some degree. Goldman flags fierce competition from Dollar General and Walmart.
RH: Goldman turns less bearish
Goldman upgraded RH, parent of Restoration Hardware, to neutral from sell with a $155 price target, near the current level. RH has been under pressure year to date. Goldman thinks the biggest headwinds have started to ease. Gross margins had been squeezed by promotional activity, which is unusual for RH since it rarely runs sales and typically ties discounts to membership. Tariff-related costs have moved to the back seat. Expenses tied to international expansion now look more manageable rather than a headwind.
Goldman sees growth drivers into 2027: international gallery openings contributing a full year of revenue from the real estate business, and a replacement cycle as customers refresh aging furnishings bought during the pandemic. That refreshment cycle applies across the range, from high-end furniture makers to Wayfair-tier retailers.
The K-shaped economy backdrop
The pairing of a value retailer and a high-end one maps directly onto the K-shaped economy. Higher socioeconomic brackets keep spending, while lower brackets continue to struggle and hunt for value.
Meta: super-sensing AI glasses and a trimmed target
Financial Times reporting says Meta is testing "super sensing" AI glasses, the next layer of its glasses line. These would use cameras and audio to capture every moment, continuously recording audio while snapping photos every few seconds. The current AI glasses already feature HD cameras, voice control, and integration with music and audio streaming apps, letting users say things like "Hey, Meta, record this" or ask about what they're looking at. The new glasses would reportedly help a user recall what they saw and heard during the day, possibly through a feature like "Hey, Meta, what did I see earlier?" that plays it back.
The always-recording capability raises the question of being recorded without consent, though covert recording through phones, pens, and other devices is already common.
Separately, Goldman lowered its price target on Meta to $815 from $830, having already cut it to $830 in the spring, while keeping a buy rating. The firm has been watching Meta's capex spending. EssilorLuxottica, maker of the glasses, had been a stock pick that soared on the Meta glasses momentum before pulling back.
