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Key Stats for Dollar General Stock
- Yesterday’s Price Change: 5%
- Current Share Price: $98
- 52-Week High: $147
- DG Stock Price Target: $92
What Happened?
Dollar General (DG) stock surged close to 5% yesterday, building on four consecutive sessions of gains, primarily in response to Walmart’s announcement that it would raise prices due to newly implemented tariffs.
The discount retailer appears to benefit from President Trump’s weekend post on Truth Social urging Walmart to absorb tariff costs rather than pass them to consumers.
This marks the second significant jump for Dollar General stock related to Walmart’s tariff stance, following a 6% gain on May 15 when Walmart first mentioned potential price increases during its earnings call.
The retail sector is facing significant uncertainty regarding how to handle the impact of new tariffs. Walmart’s decision to raise prices potentially creates an opening for Dollar General to attract price-sensitive shoppers.
Analysts have taken notice, with Morgan Stanley raising its price target on DG stock to $85 from $80 while maintaining an “Overweight” rating. Goldman Sachs also increased its target to $96 from $85 with a “Buy” rating.
Last week, Evercore ISI added Dollar General stock to its “Outperform Tactical and Action Positioning Call List,” suggesting the company’s upcoming Q1 earnings release on June 3 could “keep the stock grinding higher.”
The average target price for DG stock is about $92.46, which is 6% below the current trading price.
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What the Market Is Telling Us
The continued momentum in Dollar General stock signals investors view the company as relatively well-positioned to weather and benefit from a high-tariff environment.
According to Citigroup research, only about 10% of Dollar General’s inventory is exposed to tariffs, with more than 80% of revenue coming from consumer staples like groceries, paper products, and cleaning supplies. This limited exposure provides a competitive advantage over retailers dependent on imported goods.
Alternatively, some analysts are concerned about several underlying challenges Dollar General stock faces.
The company has reported flat same-store sales over the past two years, indicating weak demand in existing locations. Its gross margin of 30% is considered low for the retail sector, suggesting limited pricing power in a competitive market.
Additionally, the company’s $17.46 billion debt burden significantly exceeds its $932.6 million cash position, resulting in a concerning net-debt-to-EBITDA ratio of over 6x (we prefer stocks to have under 3x).
The mixed sentiment around Dollar General stock reflects the tension between near-term opportunities created by the tariff environment and longer-term structural challenges.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
