Dollar General's (DG) stronger-than-expected fiscal Q1 results have reinforced confidence in management's ability to meet long-term sales and margin goals, Oppenheimer said in a note Wednesday.
The company reported adjusted earnings of $1.78 per share, beating the $1.49 analyst consensus, while net sales rose to $10.44 billion, ahead of the $10.29 billion estimate.
The firm said Dollar General's business model remains resilient during economic downturns, which could enhance the stock's appeal in a more uncertain environment.
Oppenheimer added it is increasingly confident in the company's ability to sustain 2% to 3% comparable sales growth and to make steady progress toward achieving 6% to 7% operating margins by fiscal 2028 or 2029.
However, the brokerage noted several risks to the bull case, including potential headwinds from tariffs, a more promotional retail landscape, weaker consumer spending tied to inflation or reduced Supplemental Nutrition Assistance Program benefits, and possible execution challenges. Wage inflation could also pressure results, according to the note.
Oppenheimer upgraded Dollar General to outperform from perform and set a price target of $130.
Price: 110.35, Change: -2.27, Percent Change: -2.02
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