Analyst support helping Dollar General shares rebound
Shares of Dollar General have recovered a lot of the 8 percent they lost Tuesday after the company’s top executives said they are seeing greater pressures on consumer sentiment as well as more price competition. As of 10 a.m. this morning, the stock (Ticker: DG) was changing hands at $45.21. It had closed Monday around $46.50 and dipped below $42.50 early yesterday.
No doubt helping soothe investors’ fears are numerous comments from analysts following the company. Nearly to a man and woman, they trimmed their price targets for Dollar General but left plenty of upside and reiterated their upbeat ratings. The only outright downgrade we’ve seen came from Denise Chai at Bank of America Merrill Lynch, who lowered her rating to ‘neutral’ from ‘buy.’
Here’s a rundown of the other analyst actions since midday Tuesday.
• RBC’s Scott Ciccarelli said Dollar General’s adjusted guidance for the fourth quarter and full year “is likely conservative.” He trimmed his price target on the company to $54 from $61 but kept his ‘outperform’ rating.
• Dutch Fox at FBR Capital Markets made a similar adjustment to his price target, going to $55 from $61. He also reiterated his ‘outperform’ rating.
• Meredith Adler at Barclays — who on Tuesday asked a pointed question about the company’s ability to stay out of a vicious cycle of price-cutting to keep market share — trimmed her target to $52 from $58. She kept her ‘overweight’ rating.
• BMO Capital Market’s Wayne Hood lowered his target to $60. He also still has the stock at ‘outperform.’
• Deb Weinswig at Citi says CEO Rick Dreiling and his team are among the best in the business and has reiterated her ‘buy’ rating. But that didn’t stop her from lowering her target to $55 from $65.
• Among the few with ‘neutral’ ratings on the Street is Michael Exstein at Credit Suisse. His new price target is just $48, down from $56.
• And lastly, John Heinbockel at Guggenheim Securities reiterated his $57 target and ‘buy’ rating, saying that the initial investor reaction to the Q3 report and Q4 outlook was “way overdone.” Dreiling’s cautious guidance, Heinbockel added, has more to do with the fact that last year’s fourth quarter included a very warm January that produced exceptional sales. Even with same-store sales growth of just 3.5 percent, Q4’s earnings per share should come in at 93 cents, Heinbockel noted, which would be well above the 90-cent consensus.
- Area Stocks
- Retail
- Bank of America Merrill Lynch
- Barclays Capital
- Citigroup Inc.
- Credit Suisse Securities (USA) LLC
- Dollar General Corp.
- Guggenheim Securities LLC
- RBC Capital Markets
- analyst actions
- Deborah Weinswig
- FBR Capital Markets
- John Heinbockel
- Meredith Adler
- Denise Chai
- Dutch Fox
- Michael Exstein
- Scott Ciccarelli
- T. Wayne Hood
- Stock valuation




