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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 $220.10, moving -0.61% from the previous trading session. This change lagged the S&P 500's daily loss of 0.04%. At the same time, the Dow lost 0.14%, and the tech-heavy Nasdaq gained 2.14%.

Coming into today, shares of the discount retailer had gained 5.23% in the past month. In that same time, the Retail-Wholesale sector gained 4.29%, while the S&P 500 gained 5.1%.

Dollar General will be looking to display strength as it nears its next earnings release. On that day, Dollar General is projected to report earnings of $2.38 per share, which would represent a year-over-year decline of 1.24%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $9.47 billion, up 8.19% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $11.19 per share and revenue of $40.04 billion, which would represent changes of +4.78% and +5.79%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Dollar General. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Within the past 30 days, our consensus EPS projection has moved 0.01% higher. Dollar General currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Dollar General has a Forward P/E ratio of 19.79 right now. Its industry sports an average Forward P/E of 22.4, so we one might conclude that Dollar General is trading at a discount comparatively.

Investors should also note that DG has a PEG ratio of 1.87 right now. 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. Retail - Discount Stores stocks are, on average, holding a PEG ratio of 2.06 based on yesterday's closing prices.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 172, putting it in the bottom 32% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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