Avondale Partners analyst Mark Montagna says investors shouldn't be surprised if Dollar General later this week guides its 2014 EPS outlook below the $3.70 the Street now sees the company making. Growth in the company's sales per square foot is slowing and the growth in tobacco sales will continue to pressure margins. Montagna has trimmed his EPS forecast for the year to $3.60 from $3.70 and his price target to $65 from $67. Dollar General shares (Ticker: DG) closed Friday at $59.39 and are down slightly over the past three months.
The easy gains are in the past and DG is now a story of 2%-4% comps, square footage growth of approx. 6%-7%, EBIT gaining 10-20 bp, and buying back approx. 3% of shares outstanding. This should consistently deliver EPS gains of 8%-12%.
The average per-gallon price of regular gas in Nashville on Sunday was $3.22, unchanged from the mark of a week ago and up 13 cents from the $3.09 figure from a month ago, according to AAA The Auto Club Group.
Relatedly, Tennessee’s average price was $3.22 Sunday, up on cent compared to the $3.23 figure from the previous week.
Although gas prices haven’t spiked yet, they are still on the rise, AAA reports. Pump prices rose about three cents from the nationwide mark last week, with Southeastern states making smaller gains.
“Although we haven’t seen gas prices spike yet, motorists should still expect them to rise well into spring,” Mark Jenkins, spokesman, AAA – The Auto Club Group, said in a release. “At this point, there are several factors that have placed upward pressure on oil prices in addition to seasonal maintenance and jump in demand.”
Last week, the market got some positive news that payrolls increased more than forecast for February, AAA reports. In addition, the current geopolitical tensions in Russia have the market concerned about a possible supply disruption at a time when fuel demand picks up globally, the auto group added.
A barrel of oil closed Friday at 102.58 on the New York Mercantile Exchange, one cent more than the figure of the week prior.
For comparison with Tennessee’s average of $3.22, Georgia’s average price for a gallon of regular gas was $3.32 yesterday, up two cents compared to the mark of the previous Sunday. Florida's average of $3.49 rose three cents.
Wunderlich Securities analyst Kevin Reynolds has taken note of the very nice run Pinnacle Financial Partners has had in recent months and downgraded shares of the largest bank headquartered in the Nashville area to 'hold' from 'buy.' It's a simple valuation call: Reynolds says Pinnacle (Ticker: PNFP) deserves to trade at a multiple to its peers but that it would be getting ahead of itself if it traded higher than its current level of $37.
Seth Basham at Wedbush has formally launched his coverage of Tractor Supply with an 'outperform' rating and a price target of $80. That leaves investors an upside of about 10 percent from the stock's (Ticker: TSCO) current level.
KeyBanc Capital Markets analyst Brad Thomas says home goods seller Kirkland's has been smartly putting its money to work on new logistics and IT systems and could see a margin bump of up to 2 points. He has hiked his rating on the shares of Kirkland's (Ticker: KIRK) to 'buy' from 'hold' and sees them climbing back to $24 from the $19.77 where they opened this morning.
The Gulch has a new restaurant — at least in concept. Owned by Henry Hillenmeyer, who owned the two eateries that previously operated from the Icon space, the place is called City Fire American Oven and Bar. Read more here courtesy of our friends at the Scene.