On Thursday, Argus made a bullish move on Dollar General (NYSE:DG), increasing the stock's price target to $175 from $160 while reaffirming the Buy rating. This adjustment follows the retailer's latest financial disclosures.
Dollar General's fourth-quarter earnings, released on March 14, exceeded the consensus expectations. However, the forecast for fiscal year 2025's earnings per share was slightly under the projection set by Argus.
CEO Todd Vasos, in his recent earnings call, emphasized the company's swift and effective actions, noting that while some initiatives are already bearing fruit, others will require more time to achieve their intended impact.
The company reported that it had expanded its market share in both consumable and non-consumable products during the fourth quarter. In light of these developments, Argus has introduced an estimate for fiscal year 2026, predicting sales growth of approximately 5.5% and a modest enhancement in operating margin, leading to an earnings per share of $8.50.
The firm's estimated earnings before interest and taxes (EBIT) for Dollar General stand at $2.7 billion, with anticipated depreciation costs around $975 million. Consequently, the estimated earnings before interest, taxes, depreciation, and amortization (EBITDA) are projected to reach $3.68 billion. The analyst's remarks reflect a cautious optimism for the retailer's future performance.
InvestingPro Insights
Following Argus's positive outlook on Dollar General, it's worth noting some key metrics and insights from InvestingPro. With a market capitalization of $34.38 billion and a P/E ratio that stands at 20.57, Dollar General is recognized as a significant player in the Consumer Staples Distribution & Retail industry. The company's ability to maintain profitability is supported by a solid gross profit margin of 30.29% over the last twelve months as of Q4 2024, which aligns with the analyst's positive sentiment.
InvestingPro Tips indicate that despite a recent downward revision in earnings by analysts for the upcoming period, Dollar General's liquid assets surpass its short-term obligations, providing financial stability.
Moreover, analysts predict the company will maintain profitability this year, which is corroborated by the company being profitable over the last twelve months. A notable 47.81% price uptick over the last six months suggests investor confidence in the company's performance.
For readers interested in a deeper analysis, there are additional InvestingPro Tips available for Dollar General, which can be accessed through InvestingPro's tailored insights. To enhance your investment research, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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