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Investing.com - CFRA has raised its price target on Dollar General (NYSE:DG) to $126.00 from $118.00 while maintaining a Hold rating on the stock. According to InvestingPro data, the stock has surged over 51% in the past six months, though it’s currently trading at $111.49, with analysts’ targets ranging from $80 to $135.
The firm cited encouraging year-to-date results that suggest the retailer’s "Back to Basics" strategy is gaining traction. Dollar General has delivered two consecutive quarters of solid comparable sales growth, with 2.4% in the first quarter and 2.8% in the second quarter. InvestingPro analysis shows the company maintains healthy financials with a current ratio of 1.23, indicating sufficient liquidity to meet short-term obligations.
CFRA attributes this momentum to better execution, including cleaner stores, stronger in-stocks, and improved labor availability. These improvements are driving notable reductions in shrink and inventory damages, according to the research firm. The company’s operational efficiency is reflected in its gross profit margin of 29.8% and revenue growth of 4.77% over the last twelve months. For deeper insights into Dollar General’s performance metrics and future outlook, check out the comprehensive Pro Research Report available on InvestingPro.
The retailer is benefiting from customer trade-down and resilient demand among its core lower-income households, despite weak overall consumer sentiment. CFRA’s new price target represents approximately 18 times its fiscal year 2027 earnings per share estimate of $6.98, up from a previous estimate of $6.55.
CFRA also noted that ongoing store renovations should support stronger comparable sales over the next few years, which it considers critical if Dollar General aims to restore operating margins to 6%-7% within three to four years, compared to the 4.8% operating margin forecasted for the current fiscal year.
In other recent news, Dollar General reported strong financial results for the second quarter of 2025, outperforming analysts’ expectations. The company achieved earnings per share (EPS) of $1.86, significantly surpassing the anticipated $1.57. This represents an 18.47% positive surprise for investors. Revenue also exceeded forecasts, reaching $10.73 billion compared to the expected $10.68 billion. These financial achievements come amid a competitive retail environment and reflect Dollar General’s effective operational strategies. Additionally, the robust earnings report contributed to a pre-market increase in the company’s stock price. Analysts had previously set expectations lower, making this outcome particularly notable. The positive results highlight the company’s resilience and ability to deliver on financial targets.
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