Dollar General Seen As Winner From Wal-Mart Store Closures

Part of Wal-Mart Stores, Inc. WMT’s scramble to re-position itself to compete with Amazon.com Inc. AMZN and other e-commerce names has included aggressive cost-cutting measures such as the closure of al large number of the company’s experimental Walmart Express and Neighborhood Market locations.

In fact, Walmart recently announced plans to close 125 of these stores by Jan 28.

In a new report, PiperJaffray analyst Peter Keith explains why Dollar General Corp DG is the best-positioned company to benefit from the closures.

According to Keith’s research, Dollar General has much closer locations to the closing Walmart stores than rivals Dollar Tree, Inc. DLTR and Family Dollar Stores, Inc. FDO.

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“All in, we see the market share gains from the closed stores as a 30-40 bp driver and ~$0.035 benefit to 2016 EPS,” he said of Dollar General.

The firm maintains its Overweight rating and $78 target for Dollar General .

Disclosure: the author holds no position in the stocks mentioned.