By Dhirendra Tripathi – Dollar Tree (NASDAQ:DLTR)shares fell 2.4% during Thursday’s session after Piper Sandler downgraded the discount chain to neutral with a $102 target.

Rising freight costs and wage pressure and Dollar Tree’s limited capacity to pass on the cost increases given its $1 price point are the concerns that weighed on Piper while it reassessed the retailer.

Piper analyst Peter Keith’s new target price is almost 13% lower than the previous target and just 3% more than the stock’s current level of $99.

"For wages, low-income wage growth and total wage growth is at the highest levels since Dollar Tree’s IPO in 1995. Meanwhile, the job quit rate in the broader retail sector is at a >20 year high. We estimate a $1/hour pay increase to store associates would represent a $215 million headwind," Keith wrote in the note.

Keith earlier had an overweight on the stock with a $117 target.

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