Bank of America Puts New Street-High Price Target on Dollar General (NYSE:DG) Stock

The discount retailer has often fared better than its more upscale competitors, particularly in recession. As more shoppers downgrade their consumption to the inexpensive fare, the retailers of same do well accordingly. Recently, Bank of America put out a new report on discount retailer Dollar General (DG), and the news was positive enough. But investors were concerned, and shares ticked up just fractionally in Friday afternoon’s trading.

Bank of America—via analyst Robert Ohmes, who has a five-star rating on TipRanks—hiked his price target on Dollar General from $100 even to $115. That not only represents a premium of 14.3% against the closing figures on Thursday, but also a new Street-high price target, according to a report from CNBC. Ohmes also looks for Dollar General to post $1.40 per share in adjusted earnings, as well as 1% growth in comparable-store sales against the last measurement.

Ohmes noted that Dollar General stock is currently at a substantial discount against its competitors in the field, as well as compared to its own history. That should, Ohmes noted, reflect all risks of competition or expense in the current share price. Throw in a “back to basics” strategy that seems to be working in its favor right now—not to mention economic conditions that are doing likewise—and the end result should be a positive one for Dollar General.

An Unexpected Development

History also seems to be on Dollar General’s side too, as reports suggested that Dollar General stock was on track to gain ground for the fifth week out of the last six in total. Throw in a new gain from Evercore ISI that put Dollar General on its “Outperform Tactical and Action Positioning Call List,” and noted a potential for a gain anywhere from “…high single-digit to low double-digit” levels over the next few weeks.

And with earnings likely to show some positive results, that in turn should help keep Dollar General’s share price on a generally upward slope.

Is Dollar General Stock a Buy?

Turning to Wall Street, analysts have a Hold consensus rating on DG stock based on nine Buys, 11 Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 30.70% loss in its share price over the past year, the average DG price target of $92.57 per share implies 8.9% upside from current levels.

See more DG analyst ratings

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