Dollar General price target raised to $81 from $79 at Piper Sandler

Piper Sandler raised the firm’s price target on Dollar General (DG) to $81 from $79 and keeps a Neutral rating on the shares following a solid Q4 and earnings call that framed up a new earnings algo to achieve 10% EPS growth annually by 2026. To the positive, Dollar General is starting to see “trade-in” from upper income consumers, which has allowed sales trends to hold steady. Also, the company highlighted several margin drivers to get EBIT margin back to 6%-7%. Last, Piper is also intrigued with the company’s plan to push its same-day delivery partnership with DoorDash (DASH) to 10K stores by year-end. To the negative, comparable sales growth remains sluggish, the path to 10% EPS growth by 2026 isn’t fully clear to Piper, and guidance doesn’t appear to factor in tariffs pressuring spending trends on the company’s lower income customer base.