UPDATE: Deutsche Bank Raises PT on Dollar General on 4Q Results, FY13 Guidance
In a report published Monday, Deutsche Bank analyst Paul Trussell reiterated a Buy rating on Dollar General Corp. (NYSE: DG), and raised the price target from $50.00 to $55.00.
In the report, Trussell noted, “DG's 4Q results and FY13 guidance were better than feared, in our view, likely leading to modest upside in the shares today. 3 items stand-out in particular: (1) 4Q GPM rose 34 bps YOY, well above our negative 7 bps forecast, as pricing investment and mix pressure were not significant enough to offset the LIFO benefit, transportation efficiencies, and improved IMU; (2) SSS of 3.0% in 4Q (in-line with DB) and guidance for 4.0%-6.0% in FY13 (well ahead of our 3.8% view) suggests that the dollar sector remains positioned to gain further market share of consumables from big box peers as in-store initiatives drive solid traffic, despite macro headwinds; and (3) the company's strong b-sheet continues to support EPS growth through debt reduction and share repurchases.”
Dollar General Corp. closed on Friday at $50.07.
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