Deutsche Bank Downgrades Dollar General (DG) to Hold

Deutsche Bank downgraded Dollar General (NYSE: DG) from Buy to Hold with a price target of $99.00 (from $95.00).Analyst Paul Trussell tied the downgrade to valuation.

"While we see DG as a unique retailer with accelerating square footage growth, upside opportunity on margins, sustainable positive SSS, and strong cash flow to support share repurchases, we are downgrading DG to Hold from Buy (even while increasing our target P/E multiple) due to valuation (DG is trading ~2.5 turns above its three-year average on our FY17 EPS estimate). Our new price target of $99 is based on 19.0x (vs. 18.0x prior) our FY17 EPS estimate of $5.20 (down from $5.25 due to lower margin assumptions), which no longer equates to a Buy," said Trussell.

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 $94.74 yesterday.

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