Dollar General: Morgan Stanley raises PT to $125 from $115, maintains Equal-Weight rating.

Dollar General: Morgan Stanley raises PT to $125 from $115, maintains Equal-Weight rating.

In a recent update, Morgan Stanley has increased its price target for Dollar General Corporation (DG) to $125, up from the previous target of $115. This revision reflects the investment bank's positive assessment of the retailer's second-quarter performance, despite ongoing margin pressures from tariffs and cautious guidance [1].

Dollar General, which specializes in the distribution of reduced-price mass consumption products, reported a recovery in comparable sales and margins during the latest quarter. The company's net sales breakdown includes consumption products (82.2%), seasonal products (10%), household items (5.1%), and clothing and accessories (2.7%) [3]. Morgan Stanley noted that Dollar General is "recapturing a respectable and solid comp and EPS algorithm" [1], pointing to strong margin gains in the latest quarter.

The investment bank maintained an Equal-weight rating on Dollar General, indicating a balanced view of the stock's potential. While the price target increase suggests optimism about the company's growth prospects, the Equal-weight rating reflects a neutral stance on the stock's relative valuation compared to its peers.

The update from Morgan Stanley follows a broader trend of the investment bank raising price targets on several U.S. retail stocks following stronger-than-expected second-quarter results. Other retailers that saw their targets lifted include Dick’s Sporting Goods, Ollie’s Bargain Outlet, and Ulta Beauty [1].

References:

[1] https://ca.finance.yahoo.com/news/morgan-stanley-ups-price-targets-135809878.html
[2] https://finance.yahoo.com/news/morgan-stanley-ups-price-targets-135708861.html
[3] https://www.marketscreener.com/news/morgan-stanley-adjusts-price-target-on-dollar-general-to-125-from-115-maintains-equalweight-ratin-ce7c50ddd989f025