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Dollar General (DG) Gains But Lags Market: What You Should Know

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In the latest trading session, Dollar General (DG - Free Report) closed at $159.92, marking a +0.08% move from the previous day. This move lagged the S&P 500's daily gain of 0.75%. Meanwhile, the Dow gained 0.69%, and the Nasdaq, a tech-heavy index, added 1.32%.

Coming into today, shares of the discount retailer had lost 1.92% in the past month. In that same time, the Retail-Wholesale sector gained 0.59%, while the S&P 500 gained 3.42%.

Wall Street will be looking for positivity from DG as it approaches its next earnings report date. This is expected to be December 5, 2019. The company is expected to report EPS of $1.38, up 9.52% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $6.92 billion, up 7.77% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.61 per share and revenue of $27.67 billion. These totals would mark changes of +10.72% and +7.97%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for DG. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.05% lower. DG is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note DG's current valuation metrics, including its Forward P/E ratio of 24.33. This valuation marks a premium compared to its industry's average Forward P/E of 23.41.

Investors should also note that DG has a PEG ratio of 2.38 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. DG's industry had an average PEG ratio of 2.37 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 8, which puts it in the top 4% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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