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DG Will See Higher Future Earnings Power From Margin Expansion

Optimized Store Portfolio And POpshelf Expansion Will Drive Efficiency

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DG
AnalystHighTarget
Not Invested
Published 12 Apr 2025

Update shared on 19 Dec 2025

Fair value Increased 22%
Previous
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AnalystHighTarget's Fair Value
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1Y
79.7%
7D
3.1%

Narrative Update on Dollar General Analyst Price Target

Analysts have lifted their price target on Dollar General from approximately $135.00 to about $164.66, citing expectations for stronger profit margins and a slightly higher future earnings multiple, despite modestly slower projected revenue growth and a marginally lower discount rate.

What's in the News

  • Raised full year fiscal 2025 diluted EPS guidance to approximately $6.30 to $6.50, up from $5.80 to $6.30, and nudged net sales growth outlook to about 4.7% to 4.9% from 4.3% to 4.8% (Corporate Guidance: Raised)
  • Completed long running share repurchase program originally announced in 2012, retiring 123,531,571 shares, or about 45.04% of shares outstanding, for a total of $14.62 billion (Buyback Tranche Update)
  • Launched its Holiday Toy Book in stores and online, highlighting exclusive, value focused toy assortments and promotions, including an instant 25% savings when customers spend $75 or more on toys in a single transaction (Product-Related Announcements)

Valuation Changes

  • Fair Value: Increased significantly from about $135.00 to approximately $164.66 per share, reflecting a higher intrinsic valuation estimate.
  • Discount Rate: Declined slightly from roughly 7.87% to about 7.76%, implying a modestly lower required return on equity.
  • Revenue Growth: Trimmed slightly from an estimated 5.10% to around 4.88% annually, signaling a marginally more cautious top line outlook.
  • Net Profit Margin: Risen meaningfully from approximately 3.69% to about 4.12%, indicating improved profitability assumptions.
  • Future P/E: Increased moderately from about 21.2x to roughly 22.6x, suggesting a somewhat richer valuation multiple on forward earnings.

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Disclaimer

AnalystHighTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystHighTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystHighTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.