Dreiling’s Move to Dollar Tree’s CEO Suite Does Not Change Our Outlook; Shares Seem Rich

Our $118 per share valuation of no-moat Dollar Tree should not change in the aftermath of the announcement that Rick Dreiling will be installed as CEO, replacing Mike Witynski, as of Jan. 29. Dreiling has served as the company’s executive chairman since activist investor Mantle Ridge took a role on the company’s board of directors and was made a part of the leadership team largely because of his successful tenure as the head of narrow-moat Dollar General from 2008 to 2015. So, to us, the move is not a large surprise.