Sep. 17 at 3:36 PM
Bernstein has initiated coverage of discount retailers Dollarama and Five Below, taking a bullish stance on the Canadian chain and a cautious view on the U.S. counterpart.
Dollarama: Rated Outperform with a C
$220 price target. Analysts describe it as “Canada’s Costco,” noting clean, well-organized stores that serve all income levels and are 50% more productive than typical U.S. dollar stores. With ~45% gross margin and 27% EBIT, Dollarama’s performance is exceptional by U.S. standards. Despite a premium P/E of ~40, Bernstein sees 19% upside driven by expansion into Australia, Mexico, and other international markets, plus growth via Dollarcity in Latin America.
Five Below: Rated Market Perform with a
$160 price target, reflecting a more cautious outlook compared to Dollarama.
$FIVE $DOL.TSX
