Telsey Reiterates Outperform Rating on Dollar General (DG)

Telsey analyst Joseph Feldman reiterated an Outperform rating and $168.00 price target on Dollar General (NYSE: DG).

The analyst comments "We expect continued sequential improvement at Dollar General in 2Q24 and 2024—reflecting recovery of traffic and units, partly offset by tough consumer spending trends and promotions. We continue to believe CEO Todd Vasos has brought stability to the business, reasserting financial discipline and renewing a sense of urgency to improve and grow. The company’s balanced approach to real estate projects (slower store growth and more remodels in 2024), plans to expand fresh products and self-distribution capabilities, and the rollout of the Back to Basics strategy—improving front-end/checkout experience, managing inventory, reducing shrink, enhancing distribution productivity, and selling relevant merchandise—are steps in the right direction to revive and grow the business. This should be partly offset by the tight consumer spending environment and increase in competition—including Walmart increasing grocery rollbacks (~7,200 total) and Target lowering prices (5,000+ items). Taken together, we believe solid execution of the core strategy and lapping SNAP cuts, elevated shrink, and labor investments from prior years should help the company return to earnings growth in 2H24 and beyond. We maintain our Outperform rating and 12-month price target of $168, which is based on applying a P/E multiple of ~20x to our 2025 EPS estimate of $8.26."

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 $123.24 yesterday.

You May Also Be Interested In

• CFRA Starts SpaceX (SPCX) at Sell, 'Our primary concern is that SpaceX’s long-term strategy remains heavily dependent on Starship'
• SpaceX (SPCX) reaches new intraday/all-time highs
• Precipio seeks shareholder votes to meet quorum for annual meeting