Bernstein analyst Zhihan Ma has maintained their bullish stance on DG stock, giving a Buy rating today.
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Zhihan Ma’s rating is based on Dollar General’s impressive financial performance in the recent quarter, where the company exceeded expectations in both revenue and earnings per share. The company reported a notable increase in comparable sales and a significant improvement in gross margins, driven by factors such as reduced shrinkage and higher inventory markups. This strong performance led Dollar General to raise its guidance for the fiscal year, reflecting confidence in its continued growth.
Additionally, Zhihan Ma sees further potential for Dollar General, particularly in its ability to attract a diverse customer base, including both low-income and middle-to-high-income consumers. The company’s strategy of self-improvement, such as store remodels and gross margin enhancements, positions it well to navigate potential macroeconomic challenges. Despite a conservative guidance, the analyst believes there is upside potential, supporting the Buy rating with a target price of $134.
In another report released today, Barclays also maintained a Buy rating on the stock with a $127.00 price target.