Yahoo Finance Bear of the Day: Dollar General (DG)
Dollar General DG, a current Zacks Rank #5 (Strong Sell), is a discount retailer in the United States offering a wide selection of merchandise, consumable items, seasonal items, home products, and apparel.
Analysts have taken a bearish stance on the company’s earnings outlook, with expectations decreasing across all timeframes over the last several months.
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Down more than 30% in 2023, what’s going on with Dollar General shares? Let’s take a closer look.
Current Standing
Dollar General has posted mixed quarterly results lately, falling short of the Zacks Consensus EPS estimate in two of its last three quarters. In its latest release, DG fell short of EPS expectations by 1.7% and delivered sales results modestly below the consensus.
The market wasn’t particularly impressed with the results, sending DG shares plunging post-earnings. This is illustrated by the arrow in the chart below.
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The company’s growth is forecasted to cool in its current fiscal year (FY24), with the $10.03 per share estimate reflecting a year-over-year decline of roughly 6%. Still, growth is forecasted to resume in FY25, with expectations reflecting 9% year-over-year earnings growth on 7% higher revenues.
In addition, shares aren’t stretched regarding valuation, with the current 16.3X forward earnings multiple (F1) sitting well below the 21.1X five-year median and the Zacks Retail – Discount Stores Industry average.
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While the company’s near-term outlook may be cloudy, DG’s commitment to increasingly rewarding shareholders is worth highlighting; DG shares currently yield 1.5% annually, with the payout growing by a strong 17% over the last five years.
Bottom Line
Negative earnings estimate revisions from analysts and mixed quarterly results paint a challenging picture for the company’s shares in the near term.
Dollar General DG is a Zacks Rank #5 (Strong Sell), indicating that analysts have taken a bearish stance on the company’s earnings outlook.
For those seeking strong stocks, a great idea would be to focus on stocks carrying a Zacks Rank #1 (Strong Buy) or a Zacks Rank #2 (Buy) – these stocks sport a notably stronger earnings outlook paired with the potential to deliver explosive gains in the near term.
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Dollar General Corporation (DG) : Free Stock Analysis Report
