Discount retailer Dollar General (DG) is set to release its Q2 earnings report this week. This has some investors wondering whether it is a good idea to buy shares of DG stock beforehand.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
What Wall Street Expects
Wall Street is expecting DG to reveal second-quarter earnings of $1.56 per share, indicating a decline of 8.2% compared to the same period last year. Analysts forecast revenues of $10.67 billion, representing an increase of 4.5% year over year.
Will DG be able to beat those estimates? As can be seen below, it has a mixed track record of outperformance.
Key Issues Ahead of Earnings
Dollar General had a strong set of Q1 figures with net sales increasing by 5.3% to $10.4 billion compared to $9.9 billion last year. Same-store sales rose by 2.4%, and EPS increased by 7.9% to $1.78, exceeding expectations.
Opening new stores helped demand, as did sales through the DoorDash (DASH) platform. Same-day home- delivery services were expanded to over 3,000 stores. Earlier this month, Uber (UBER) and Dollar General announced a partnership that will bring more than 14,000 Dollar General and pOpshelf locations to the Uber Eats platform.
In general, with economic uncertainty and still-high inflation hitting shoppers in the wallet, it is a great time to offer products at discounted prices.
However, it did report a slight decrease in customer traffic and uncertainty around tariff impacts hitting consumer spending and supply chain costs.
Truist analyst Scot Ciccarelli recently raised his price target on Dollar General (DG) to $119 from $112 and kept a Hold rating on the shares. He said that the second quarter should be solid, even though comparisons are about to become more difficult for most retailers and tariff risk remains. However, he remain bullish on “favor needs-based retailers and deep value providers.”
Piper Sandler analyst Peter Keith raised his price target on Dollar General to $115 from $112 and kept a Neutral rating on the shares. He believes that Dollar General’s elevated store remodel program should drive a 2% lift to comparable sales growth over the coming years.
Is DG a Good Stock to Buy Now?
On TipRanks, DG has a Moderate Buy consensus based on 9 Buy and 13 Hold ratings. Its highest price target is $135. DG stock’s consensus price target is $119.50, implying a 6.36% upside.
