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Bulls Praise Dollar General's Q3 Earnings

Jayson Derrick

Dollar General Corp. (NYSE: DG) reported Thursday third-quarter results which were well interpreted by two analysts.

The Analysts

KeyBanc Capital Markets analyst Bradley Thomas maintains an Overweight rating on Dollar General with a $180 price target.

The Buckingham Research Group's Bob Summers maintains at Buy, $178 price target.

KeyBanc: Built For Growth And Defense

Dollar General reported an EPS beat of $1.42 in the quarter due to stronger than expected sales and a lower than expected tax rate, Thomas wrote in a note. Same-store sales were higher by 4.6% which was 1.6 percentage points better than expected. Encouragingly, comps also accelerated on a one-year and three-year basis but was slightly lower on a two-year basis.

Looking forward Dollar General's "wealth of initiatives," including a focus on DG Fresh, DG Go!, and Fast Track represent catalysts that can spur growth or emphasize the retailer's defensiveness nature. Investors should expect continued top-line growth and longer-term share gains.

Buckingham: 'Everything Is Working'

Dollar General's earnings report shows that not only is "everything is working" but the momentum can continue moving forward, Summers wrote in a note. Management is showing ongoing strategic initiatives are generating results which helps support margins, sales, same-store sales and EPS.

View more earnings on DG

The company's proposition of offering attractive value in the retail sector is backed by the "counter-cyclical nature" of the business, the analyst wrote. However, strong upside in the stock will be dependent on earnings revisions moving higher after a strong multiple expansion over the past year.

Dollar General Price Action

Shares of Dollar General closed Friday down 0.25% at $154.72.

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Latest Ratings for DG

Date Firm Action From To
Dec 2019 Maintains Overweight
Oct 2019 Maintains Overweight
Sep 2019 Maintains Buy

View More Analyst Ratings for DG
View the Latest Analyst Ratings


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