Dollar General (DG) Stock Forecast & Price Target

Dollar General has demonstrated a robust sales performance with total sales increasing by 4.5% to $10.3 billion, while comparable store sales rose by 1.2%. The company's appeal to middle and upper-income consumers has grown, leading to stable sales trends and suggesting a positive demand outlook. Additionally, Dollar General is expanding its operational capabilities through a partnership with DoorDash, which increased its same-day delivery locations significantly, indicating a strategic move to enhance customer convenience and drive future sales growth.

Dollar General is experiencing a decline in operating margins, now projected at 4.6%, a decrease of 18 basis points from the previous estimate of 4.7%. The retailer's earnings projections have also been adjusted downward, with 4Q24 EPS lowered to $1.55 and 2025 EPS revised to $6.03, reflecting challenges in the consumer spending environment particularly impacting lower-income households. Additionally, competition from other retailers and ongoing investments in pricing and wages are contributing to a weaker outlook, leading to concerns about the company's ability to achieve its targeted EPS growth of 10% by 2026.