Bank of America boosts Dollar General price target ahead of earnings
- Bank of America analyst Robert Ohmes raised Dollar General's price target by $15 to $115 ahead of the upcoming earnings report.
- Ohmes has observed accelerating sales data and believes strategic initiatives are yielding results.
- This optimistic outlook differs from the majority of analysts who have a hold rating on the stock.
On May 23, 2025, Bank of America analysts have raised their price target for Dollar General to $115, indicating a potential increase of 14.3% above the stock's closing price from the previous day. This adjustment to the price target comes just ahead of the retailer's earnings report scheduled for June 3. Analyst Robert Ohmes noted that the stock is currently undervalued compared to its historical levels and relative to its peers, leading to a belief that the risks associated with competition and expenses are already factored into the stock price. The analyst emphasized that there is increasing visibility on Dollar General's strategic initiatives and gains from its competitors’ store closures, setting a positive tone for growth in comparable sales and profitability improvement as 2025 progresses, especially in the latter half of the year. Despite most analysts maintaining a hold rating, Ohmes holds a buy rating, distinguishing him as an outlier in the analysis of the company's stock performance. Also, he cited a projection of $1.40 in adjusted earnings per share alongside an anticipated 1% growth in comparable store sales. Furthermore, Ohmes observed that sales data has shown acceleration during the first quarter, countering flat initial estimates and suggesting strong potential for upside gains. He attributed this positive outlook partly to Dollar General's successful “back to basics” strategy to enhance customer engagement and transactions. Also noted was the increasing gap in pricing compared to larger competitors like Walmart, which, despite its dominance, allows Dollar General to remain competitive. The subsequent closures of rival stores may additionally provide Dollar General an upper hand in capturing market share. In summary, the factors contributing to this heightened optimism about Dollar General include improved strategic execution, favorable market dynamics following competitor closures, and a potentially responsive sales environment as they navigate the challenges of a competitive retail landscape. As earnings are just around the corner, stakeholders and investors are keenly watching for indications that these strategic efforts are having their desired effect.