Morgan Stanley Nervous About Dollar General (DG) Into Earnings

Morgan Stanley analyst Simeon Gutman reiterated an Overweight rating and $225.00 price target on Dollar General (NYSE: DG) expecting below guidance for 2022 on tough compares, cost pressures, low income/gas price uncertainty & typical conservatism.

The analyst stated "We are Equal-weight rated and lean neutral to cautious into Q4 earnings next week. DG is a high quality, defensive, long-term compounder. Usually we advocate buying the stock on pullbacks. We downgraded the stock to Equalweight in January given our concerns over low income spending and increasing cost/inflationary pressures. We expect these factors to drive below consensus comps and EPS in '22. This seems somewhat priced in as the stock is down 15% from its December highs and we believe investors are anticipating a below Street '22 guide. Still, we lean neutral to cautious into Q4 earnings next week".

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 $206.08 yesterday.

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