UPDATE: Sterne Agee Initiates Dollar General With Neutral, Obstacles Lie Ahead
In a report published on Wednesday, Sterne Agee initiated coverage on Dollar General (NYSE: DG) with a Neutral rating and a $56.00 price target.
In the report lead, analyst Charles Grom commented that, "Despite growing SPSF by ~25% since '08 ($158-->$195), we still see multiple levers ahead for DG, incl.: (1) price investment focus = traffic gains/gradual increase in consumable SKU's; (2) continued remodel/relocation strategy (5%/25% SSS lift, resp.); (3) Phase V program on ~3,000 legacy stores; (4) additional cooler rollout (target of 18/store); (5) final push in beer/wine into ~1,000 loc's; (6) tobacco add-on will occur by 2Q13; (7) zone pricing/category management; and (8) discretionary improvement. All told, see SSS up 3-5% in '13-'15."
Dollar General closed on Wednesday at $50.19.
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