On Monday, Dollar General Corporation (NYSE:DG) saw its price target adjusted by a market analyst from Argus, who cited a more challenging operational landscape than previously expected. The new price target is now set at $170.00, down from the former $175.00, while the company retains its Buy rating.
The retail chain is navigating through a tougher operating environment, prompting the analyst to revise estimates. Despite these headwinds, there is a positive outlook for Dollar General with CEO Todd Vasos at the leadership helm. The analyst has adjusted the second-quarter earnings per share (EPS) estimate to $1.74 from the previous $1.94, attributing this to a lowered operating margin forecast.
For the full year 2026, the earnings forecast has been revised down to $8.30 per share from $8.50. This adjustment still reflects an anticipated sales growth of about 5.5% and a slight improvement in operating margin. The estimated earnings before interest and taxes (EBIT) have been reduced to $2.65 billion from $2.7 billion, with the earnings before interest, taxes, depreciation, and amortization (EBITDA) forecast now at $3.625 billion, down from $3.68 billion. These figures compare to a consensus estimate of approximately $3.6 billion.
The revised valuation is based on an analysis incorporating the new earnings estimates for fiscal years 2025 and 2026, a preliminary EPS estimate of $9.50 for fiscal year 2027, and an assumption of continued growth at a long-term rate of 10% for two additional years. Consequently, the shares of Dollar General are projected to be valued at the newly set price target of $170.00.
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