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Dollar General (DG) Dips More Than Broader Markets: What You Should Know

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Dollar General (DG - Free Report) closed the most recent trading day at $203.73, moving -0.6% from the previous trading session. This move lagged the S&P 500's daily loss of 0.29%.

Prior to today's trading, shares of the discount retailer had lost 6.11% over the past month. This has lagged the Retail-Wholesale sector's loss of 4.2% and the S&P 500's loss of 1.27% in that time.

DG will be looking to display strength as it nears its next earnings release, which is expected to be May 27, 2021. The company is expected to report EPS of $2.12, down 17.19% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8.13 billion, down 3.71% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $9.48 per share and revenue of $33.79 billion, which would represent changes of -10.73% and +0.12%, respectively, from the prior year.

Any recent changes to analyst estimates for DG should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.37% higher. DG is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, DG currently has a Forward P/E ratio of 21.62. This represents a discount compared to its industry's average Forward P/E of 26.33.

Also, we should mention that DG has a PEG ratio of 1.62. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. DG's industry had an average PEG ratio of 2.27 as of yesterday's close.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 173, which puts it in the bottom 32% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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