Dollar General: Balancing Growth Initiatives with Competitive and Economic Challenges

Morgan Stanley analyst Simeon Gutman has maintained their neutral stance on DG stock, giving a Hold rating yesterday.

Simeon Gutman has given his Hold rating due to a combination of factors impacting Dollar General’s future performance. The company is making positive strides with initiatives such as store remodels and the expansion of its digital channel, which are expected to enhance operational efficiency. However, these efforts are counterbalanced by potential macroeconomic, trade, and policy challenges anticipated to intensify in the latter half of 2025.
Additionally, while Dollar General has shown strong performance in recent quarters, with better-than-expected same-store sales and gross margins, the competitive pressure from larger players in the Warehouse/eCommerce sector poses a significant risk. This competitive landscape, along with the evolving economic conditions, creates a balanced risk/reward scenario, justifying the Hold rating as the stock price is close to the target price set by the analysis.

Gutman covers the Consumer Cyclical sector, focusing on stocks such as Ulta Beauty, Dick’s Sporting Goods, and Dollar General. According to TipRanks, Gutman has an average return of 2.8% and a 60.56% success rate on recommended stocks.

In another report released yesterday, Citi also maintained a Hold rating on the stock with a $112.00 price target.