1 Wall Street Analyst Thinks Dollar General Stock Is Going to $110. Is It a Buy?

Dollar General's (NYSE: DG) focus on offering discounted essentials could make it a top defensive play for 2025, especially with the stock trading at a deep discount. Melius Research analyst Karen Short recently upgraded the stock to a "buy" rating with a $110 price target, implying upside of 27% over the current $86.85 share price. Dollar General reported a net sales increase of 4.5% year over year in the fourth quarter, with same-store sales up 1.2%. With solid top-line performance, the stock's collapse over the past year looks overdone. Investors could be undervaluing Dollar General's potential to deliver sales growth in a challenging retail environment.For the stock to move higher, Dollar General will need to improve profitability. Its fourth-quarter operating profit was cut in half to $294 million, partly due to store closures and an impairment charge for its pOpshelf business. But management's back-to-basics strategy should shore up the bottom line with a greater focus on improving inventory efficiency and reducing costs.Continue reading

Apr 14, 2025 - 10:47

1 Wall Street Analyst Thinks Dollar General Stock Is Going to $110. Is It a Buy?

Dollar General's (NYSE: DG) focus on offering discounted essentials could make it a top defensive play for 2025, especially with the stock trading at a deep discount. Melius Research analyst Karen Short recently upgraded the stock to a "buy" rating with a $110 price target, implying upside of 27% over the current $86.85 share price.

Dollar General reported a net sales increase of 4.5% year over year in the fourth quarter, with same-store sales up 1.2%. With solid top-line performance, the stock's collapse over the past year looks overdone. Investors could be undervaluing Dollar General's potential to deliver sales growth in a challenging retail environment.

For the stock to move higher, Dollar General will need to improve profitability. Its fourth-quarter operating profit was cut in half to $294 million, partly due to store closures and an impairment charge for its pOpshelf business. But management's back-to-basics strategy should shore up the bottom line with a greater focus on improving inventory efficiency and reducing costs.