UPDATE: Deutsche Bank Reiterates Buy Rating, Lowers PT on Dollar General Corp.
In a report published Friday, Deutsche Bank reiterated its Buy rating on Dollar General Corp. (NYSE: DG), but lowered its price target from $55.00 to $50.00.
Deutsche Bank noted, “For the first time in 3-4 years, there are some cloudy skies in Goodlettsville as SSS have come under some duress. We chose the word ‘some' because a 4.0% comp is still pretty darn impressive in a retail word with many players in the red. Taking a step back, the issue we have is pinpointing the reasons for the slowdown at DG (and DLTR as well). To this end, while the usual suspects get blamed (i.e. WMT, macro, Fiscal Cliff) and may be the sole reason for the slowdown as consumers “freeze up”, we are incrementally more concerned today that something structural, such as store saturation, could be at play as well. All told, while time will tell, we'd limit our $ store exposure to one player. Said differently, in times of uncertainty, we want to own the strongest horse in the race and amongst its peers (FDO/DLTR/FRED/BIG) – DG is still our choice.”
Dollar General Corp. closed on Thursday at $44.95.
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