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On Thursday, Truist Securities adjusted its outlook on Dollar General shares (NYSE:DG), reducing the price target to $76 from $83, while maintaining a Hold rating on the stock. The adjustment follows Dollar General’s recent financial disclosures, which included fourth-quarter sales that met expectations and earnings per share that slightly exceeded forecasts. Currently trading at $77.67 with a P/E ratio of 12.8, InvestingPro analysis suggests the stock is undervalued relative to its Fair Value. However, the company’s guidance for the calendar year 2025 fell short of analyst predictions.
Scot Ciccarelli, the analyst at Truist Securities, noted that Dollar General’s long-term algorithm now reflects the expectation that margins will continue to be under pressure beyond 2025. Despite maintaining its position as a prominent player in the Consumer Staples Distribution & Retail industry with annual revenues of $40.2 billion and modest growth of 2.9%, management highlighted that the company’s core demographic, which consists of lower-income consumers, is increasingly only able to afford essential items. Additionally, there has been a noticeable uptick in customers opting for less expensive products in the first quarter of 2025. For deeper insights into Dollar General’s financial health and growth prospects, InvestingPro subscribers can access comprehensive analysis and exclusive ProTips.
The report also mentioned the bearish sentiment surrounding Dollar General prior to the announcement of their financial results. Despite concerns and a potentially weakening economy—a context in which dollar stores like Dollar General have historically thrived—the stock experienced a 7% increase at the time of publication.
Ciccarelli’s comments further elaborated on the challenges facing Dollar General, citing intensifying competition that exacerbates the pressures on consumers. This competitive environment is a contributing factor to the firm’s decision to maintain a neutral stance on Dollar General’s stock and to adjust the price target downward. The new price target of $76 reflects these considerations, marking a decrease from the previous target of $83.
In other recent news, Dollar General reported its fourth-quarter 2025 earnings, exceeding market expectations with an earnings per share (EPS) of $1.68, compared to the forecasted $1.50. The company’s revenue reached $10.3 billion, slightly above the anticipated $10.26 billion, marking a 4.5% year-over-year increase. Raymond (NSE:RYMD) James maintained its Outperform rating for Dollar General, with a price target of $100.00, following the strong earnings performance. Meanwhile, CFRA adjusted its price target for Dollar General shares, reducing it to $84 from $103, while maintaining a Hold rating. Dollar General plans to close 96 of its namesake stores and 45 pOpshelf stores in fiscal year 2026, but remains on track to open 575 new stores during the same period. The company has set ambitious targets, aiming for a 10% or higher growth in EPS by fiscal year 2027, and expects operating margins to return to 6-7% by fiscal years 2029 to 2030. Dollar General’s management also outlined long-term targets, including achieving 2-3% comparable store sales growth and returning to 10% or higher EPS growth starting in 2026.
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