Variety stores retailer Dollar General (NYSE: DG) ticked lower on Wednesday after JP Morgan analyst Matthew Boss downgraded the stock from Hold to Sell. The analyst remained concerned about the retailer’s falling market share, its rising investments, and execution risk with the new leadership in place.
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More importantly, Boss pointed out that DG’s primary target of low-end consumers is already under stress as a result of reduced savings from the pandemic and persistent inflation. Furthermore, a fall in government assistance due to the expiry of childcare taxes and cuts in the Supplemental Nutrition Assistance Program (SNAP) certainly doesn’t help.
The analyst commented, “Compounding matters, management sees excess savings for the middle-income cohort (HHI of $35K-$75K) on pace to be depleted by the end of Fall ‘23 citing potential for sequential worsening tied to student loan repayments.”
The analyst has the lowest price target on the Street at $116 per share.
What is the Price Prediction for Dollar General?
Analysts remain sidelined when it comes to DG stock with a Hold consensus rating based on seven Buys, 11 Holds and two Sells. Furthermore, with a consensus price target of $153.47, it offers investors an upside potential of 33.3% from current levels.
