Dollar General (DG) Target Raised to $85 at Piper Jaffray; Top Large Cap Pick

Piper Jaffray analyst Peter Keith reiterated an Overweight rating and boosted his price target on Dollar General (NYSE: DG) to $85.00 (from $73.00) while highlighting the stock as a Top Large Cap Pick.

Keith commented, "We are highlighting DG as a top large cap pick and raising our price target to $85 (18x 2016 EPS of $4.72). We prefer the cleaner DG story compared to the DLTR/FDO combo which carries a high execution risk profile in our view. Key themes on DG include: (1) Much better backdrop for core customer in 2015 (vs. 2013 and 2014); (2) Company specific sales drivers; (3) Gross margin stabilization; (4) Healthy unit growth profile with potential to take higher; (5) Strong cash flow profile; and (6) Attractive valuation relative to other large cap mass retailers. Also, we believe DG can post inline results for Q4, and provide guidance that suggests EPS growth acceleration."

For an analyst ratings summary and ratings history on Dollar General click here. For more ratings news on Dollar General click here.

Shares of Dollar General closed at $68.82 yesterday.

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