Dollar General Corp
Truist Securities - Reiterates Hold, price target lowered from $140 to $135
Analyst Scot Ciccarelli said the company's comparable sales were slightly better than expected, and it reiterated its outlook.
However, it appears that the year will now be a bit more backend loaded than previously anticipated, leading the analyst to modestly lower' 24/'25 estimates to $7.30/$8.05 from $7.35/$8.20.
While there have been some views of stabilization for Dollar General's customer cohort (with 4% traffic growth), shopping behaviors are historically consistent with a still-stressed customer, noted the analyst.
Dollar General, according to the analyst, will need a couple of things like shrink to move into their favor in 2H.
BMO Capital Markets - Reiterates Market Perform, price target lowered from $150 to $140
Analyst Kelly Bania said F1Q25 had some positives as EPS and comps beat with strong traffic growth, and F25 EPS guidance was maintained.
However, management commentary on core strategies and business headwinds may have disappointed investors, while additional 10-Q disclosures highlight further risks the timeline of returning 10%+ EPS growth, added the analyst.
At current levels, the analyst notes DG's stock could be getting more attractive if and when DG can return to a 10% EPS growth algorithm.
But the analyst anticipates new risks that are emerging could delay a return to that algorithm.
Telsey Advisory Group - Reiterates Outperform, price target lowered from $170 to $168
Analyst Joseph Feldman said DG executed well in 1Q24, resulting in better-than-anticipated sales and profit performance and market share gains.
Looking ahead, Dollar General maintained its 2024 guidance, but provided a slightly soft 2Q24 outlook, added the analyst.
Pressures like price sensitive consumers, higher than expected shrink should be mostly offset by gains from strategic initiatives like expansion of fresh products and self-distribution capabilities and continued emphasis on the Back to Basics strategy, said the analyst.
Overall, the analyst believes Dollar General is operating well in a tough environment and gaining market share.
J.P. Morgan - Reiterates Neutral, price target lowered from $161 to $137
Analyst Matthew R. Boss sees sequential top-line improvement in FY24 supported by management's key initiatives around in-stocks, store standards, improving customer service, and signage highlighting value to customers.
However, the analyst also expects margin headwinds relative to 2019 tied to shrink, consumables mix, markdowns, and transportation.
Price Action: DG shares are trading higher by 4.60% at $133.42 at the last check Friday.
