#7 - Dollar General (NYSE:DG)
The last stock on this list is Dollar General Corp. (NYSE: DG). As a discount-store option, it may surprise you to know that DG stock is down 13% in 2024 and over 30% in the last 12 months. After all, consumers typically turn to discount chains when they’re feeling pinched.
However, the issue isn’t revenue but earnings, which are down to 2019 levels. Plus, although the company reiterated its full-year guidance, it did note that it was still experiencing pressure from retail shrink than expected.
However, some of the earnings drop comes after the company has made significant investments in opening new stores and remodeling existing ones. This includes the company’s Popshelf store-in-store concept that better positions the company with a competitor such as Five Below Inc. (NASDAQ: FIVE).
Analysts have a consensus price target of approximately $145 for DG stock. However, on July 15, Argus issued a $170 price target. That was lower than its prior $175, but it’s still 20% above the consensus.
About Dollar General
Dollar General Corporation, a discount retailer, provides various merchandise products in the southern, southwestern, midwestern, and eastern United States. It offers consumable products, including paper and cleaning products, such as paper towels, bath tissues, paper dinnerware, trash and storage bags, disinfectants, and laundry products; packaged food comprising cereals, pasta, canned soups, fruits and vegetables, condiments, spices, sugar, and flour; and perishables that include milk, eggs, bread, refrigerated and frozen food, beer, and wine.
Read More - Current Price
- $86.52
- Consensus Rating
- Hold
- Ratings Breakdown
- 6 Buy Ratings, 15 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $113.95 (31.7% Upside)
The back-to-school season is a significant event on the retail calendar. And as parents load up on backpacks, notebooks, pencils, and more, investors can make a tidy profit by loading up on stocks of the companies that sell these products.
However, if you're thinking about investing in retail stocks, it's important to consider that this isn't going to be a rising tide that lifts all boats. Consumers are still cutting back, particularly on non-essential purchases. Many retailers, specifically specialty retailers, fit into that category.
But back-to-school shopping, while not something consumers do every day, is something that can't be ignored. According to Parents magazine, parents who earn more than $50,000 don't plan to cut back on back-to-school shopping. However, a recent NerdWallet study reminds investors that 20% of parents are planning to use “buy now, pay later" programs for their back-to-school purchases.
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