- Gordon Haskett's Chuck Grom upgrades Dollar General (DG +3.6%) to Accumulate from Reduce in a two-notch move after taking in the retailer's Q1 report.
- The analyst notes that Dollar General's new store productivity improved to 82.8% in the quarter, compared to a trailing eight quarter average of 75.2%. He also points to the outperformance in the apparel and consumables categories.
- "We are raising our estimates to take into consideration the 1Q beat, greater than expected buybacks, accretion from 322 acquired stores, and a generally more favorable outlook. Accordingly, we are raising our FY17 EPS estimate from $4.45 to $4.55, and our FY18 EPS estimate from $4.80 to $5.00. Finally, we are raising our Price Target from $67 to $84, which is based on 16.7x our FY18 estimate," write Grom.
- Previously: Dollar General beats by $0.03, beats on revenue (June 1)
- Now read: Dollar General: Recession-Proof Business At A Fair Price
Original article