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Investing.com - Telsey Advisory Group has raised its price target on Dollar General (NYSE:DG) to $123.00 from $120.00 while maintaining a Market Perform rating on the stock. The retailer, currently trading at $111.71 with a market cap of $24.56 billion, has shown strong momentum with a 51.64% price return over the past six months, according to InvestingPro data.
The research firm noted that Dollar General is transitioning from a growth retailer to a mature retailer, as evidenced by its decision to slow unit growth to approximately 2% and increase focus on in-store enhancements such as merchandising and remodels.
Telsey highlighted Dollar General’s efforts to improve in-store profitability through more effective management of operations and costs, though it cautioned that tariffs and related inflation continue to pose a threat to consumer demand.
The firm acknowledged that Dollar General shares are currently trading at a P/E multiple of 18.5x-20.0x based on the company’s 2025 EPS guidance of $5.80-$6.30.
The new $123 price target is based on applying an unchanged P/E multiple of approximately 18x to Telsey’s 2026 EPS estimate of $6.83, which the firm noted is consistent with Dollar General’s historical averages.
In other recent news, Dollar General reported strong financial results for the second quarter of 2025, surpassing analysts’ expectations. The company achieved earnings per share of $1.86, which was higher than the anticipated $1.57. Revenue also exceeded forecasts, coming in at $10.73 billion compared to the expected $10.68 billion. These results highlight the company’s robust performance and mark a significant earnings surprise of 18.47%. Furthermore, Dollar General’s "Back to Basics" strategy seems to be effective, as evidenced by two consecutive quarters of solid comparable sales growth, with increases of 2.4% in the first quarter and 2.8% in the second quarter. In light of these developments, CFRA raised its price target for Dollar General from $118 to $126 while maintaining a Hold rating. The firm’s decision reflects optimism about the retailer’s strategic direction and financial health. These recent developments indicate a positive trajectory for Dollar General.
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