JPMorgan Cuts Price Target on Dollar General

Investing.com — JPMorgan has reduced its price target on Dollar General Corporation (NYSE: DG) after the retailer reported disappointing third-quarter earnings and lowered its annual profit forecast.

JPMorgan cut its price target from $82 to $66, while keeping a Neutral rating on the stock.

The brokerage anticipates earnings growth for 2024 but warns that Dollar General will face increasing pressure on profit margins due to rising expenses and more markdowns in the future.

On Thursday, Dollar General indicated that its profit margins will be affected by heightened discounts during the holiday season, as consumers become more cost-conscious.

In Q3, the company reported earnings per share of $0.89, which fell short of analyst estimates of $0.94, despite achieving better-than-expected net sales.

Dollar General has revised its annual sales and profit forecast downward, citing growing margin pressures and repair costs from recent hurricane activity.

JPMorgan predicts below-consensus earnings for the retailer in 2025, with an expected increase in expenses next year as the company remodels many of its stores.

Following the earnings report, Dollar General's shares slightly declined in aftermarket trading, after initially recovering from their post-earnings losses on Thursday.