Dollar General (DG) stock was rated a “buy” by 64% of the 28 analysts covering the stock on March 11. The stock had a “hold” recommendation from ten analysts. On January 10, BMO Capital initiated coverage of Dollar General stock with an “outperform” rating and a price target of $126. On January 7, KeyBanc upgraded its rating from “sector weight” to “overweight.”
Dollar General has been performing better than rival Dollar Tree (DLTR), which is struggling to improve the performance of its Family Dollar banner. Dollar General’s sales grew 9.4% in the first nine months of fiscal 2018. Dollar Tree, which reported its fiscal 2018 results on March 6, generated sales growth of 2.6% in fiscal 2018.
Dollar General operated 15,227 stores as of the end of the first nine months of fiscal 2018. In fiscal 2019, Dollar General’s real estate plans include 975 new store openings, 1,000 store remodels, and 100 relocations. Dollar General will also continue to increase the cooler count in its stores to offer an expanded selection of perishable items.
Revision to price target
Several analysts have revised Dollar General’s price target this year. On January 4, UBS increased its price estimate for Dollar General stock to $125 from $120. On January 9, RBC increased its price target to $126 from $122, and J.P. Morgan raised its price target to $123 from $117. On February 22, J.P. Morgan raised its price target to $127 from $123. On March 4, Oppenheimer increased its price target to $130 from $120. As of March 11, the 12-month average price target was $121.44, which implies an upside of about 1%.
As of March 11, Dollar General stock has risen 10.8% on a year-to-date basis compared to a 15% rise in Dollar Tree stock and an 11% increase in the S&P 500 Index.
Dollar General’s upcoming results on March 14 might result in further revisions to analysts’ price target.