Investing.com -- Oppenheimer upgraded Dollar General (NYSE:DG) to “Outperform” from “Perform,” citing improved visibility into the retailer’s growth prospects and stronger confidence in management’s ability to meet long-term targets following an upbeat quarterly report.
The brokerage set a price target of $130, saying recent momentum in comparable sales and earnings, combined with operational initiatives, puts the company in a stronger position to deliver sustained improvement.
Dollar General reported better-than-expected results on Tuesday.
“We are increasingly confident in management’s ability to drive toward longer-term financial targets. This includes the potential for double-digit EPS growth in FY26 and progress toward 6-7% operating margins by FY28/FY29,” Oppenheimer said.
Oppenheimer raised its earnings estimates and now expects Dollar General to reach the higher end of its fiscal 2025 EPS guidance. It sees scope for upside to both revenue and profit as store initiatives gain traction and consumer trade-in behavior continues to support value retailers.
Shares of Dollar General, which trade at around 19 times forward earnings, remain reasonably valued, Oppenheimer said. Its $130 price target is based on a 20 times multiple of a projected $6.60 per share in earnings for fiscal 2026.
The firm also cited Dollar General’s historical resilience during downturns, suggesting the stock could attract more investor flows in an uncertain economic backdrop.
Key risks to the bull case include potential tariff-related cost pressures, a pullback in consumer spending, or slower-than-expected progress on company initiatives.
Dollar General joins Oppenheimer’s list of favored defensive names, which also includes Church&Dwight (NYSE:CHD), Costco (NASDAQ:COST), Prestige Brands, and Walmart (NYSE:WMT).