Dollar General: BofA upgrades stock

(CercleFinance.com) - Bank of America announced on Friday that it had upgraded its recommendation on Dollar General shares from 'underperform' to 'buy', with a target price left unchanged at $95.


The analyst believes that the initiatives implemented by the American low-cost retailer should bear fruit from FY 2025 onwards.

The broker says it has seen a number of encouraging signs that the company's back-to-basics strategy is working, as illustrated by the decline in inventories and the improved perception of the chain in consumer surveys.

BofA also highlights the good performance of the Value Valley range (items priced at just one dollar), while welcoming the recent arrival on its shelves of beauty products from the e.l.f. brand.

Despite these positive factors, BofA indicates that it has revised its earnings forecasts for 2025 downwards, anticipating a further rise in wage costs and the need to invest in promotions in view of the current market environment.

BofA adds that planned store closures by competitors such as Family Dollar, CVS and Walgreens could also help the company to cope with Walmart's pressure on market share.


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