Dollar General (DG – Research Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst yesterday. Analyst Kate McShane from Goldman Sachs downgraded the rating on the stock to a Hold and gave it a $116.00 price target.
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Kate McShane’s rating is based on Dollar General’s current stock valuation, which reflects its improved fundamentals. The company has made significant strides through its Back to Basics program, enhancing its comparable sales trends and margins. However, McShane believes that the stock’s current price already accounts for these improvements, making further upside challenging.
Additionally, the competitive landscape remains intense, which could affect the company’s same-store sales growth. Dollar General also needs to continue investing in its stores and supply chain, which could limit short-term gains. The stock’s performance has lagged behind the S&P 500 since being added to the Americas Buy List, further supporting the Hold rating.
DG’s price has also changed dramatically for the past six months – from $74.640 to $113.310, which is a 51.81% increase.