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Investing.com - Raymond James raised its price target on Dollar General (NYSE:DG) stock to $130.00 from $125.00 on Friday, while maintaining an Outperform rating following the retailer’s second-quarter financial results. According to InvestingPro data, the stock has shown remarkable momentum with a 52% return over the past six months, while currently trading near its Fair Value.
The discount retailer exceeded expectations for comparable sales, gross margin percentage, and earnings per share in the quarter, according to Raymond James. The company maintains a healthy 30.2% gross profit margin and generated $1.9 billion in free cash flow over the last twelve months.
Dollar General demonstrated operational progress with margin recovery supported by lower shrink, which provided approximately 108 basis points of benefit, alongside lower damages and solid inventory execution with levels down about 6% year-over-year.
The company also reported reduced turnover among hourly employees and store management compared to the previous year, which Raymond James cited as evidence that Dollar General’s back-to-basics strategy is yielding results.
While Raymond James acknowledged potential challenges in the second half of 2025 due to tariff uncertainty affecting consumer demand, the firm expressed confidence that Dollar General’s improved execution across stores and supply chain is strengthening the foundation for sustainable earnings growth.
In other recent news, Dollar General reported second-quarter results that exceeded expectations, with both sales and earnings per share surpassing projections. The company achieved a 2.8% increase in comparable store sales, which is at the higher end of its 2%-3% target range. Piper Sandler responded to these results by raising its price target for Dollar General from $115 to $117, while maintaining a Neutral rating. Telsey Advisory Group also adjusted its price target, increasing it from $120 to $123, and noted the retailer’s transition towards a mature business model. KeyBanc maintained its Sector Weight rating, highlighting the company’s strong performance across various categories, including consumables and apparel. Guggenheim reiterated a Buy rating with a price target of $125, despite concerns about future growth prospects. The firm pointed out that improvements in shrink expenses have contributed to Dollar General’s performance. Meanwhile, BMO Capital reiterated its Market Perform rating, citing the company’s back-to-basics strategy and margin recovery. These developments reflect Dollar General’s current strategic adjustments and market positioning.
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