Shares of Dollar General rallied for a second straight day Tuesday, boosted by two analysts bucking most of their peers by upgrading the discount retailer.
Both Michael Montani at Evercore ISI and Daniela Nedialkova at Atlantic Securities on Monday raised their ratings for Goodlettsville-based Dollar General to overweight/outperform from neutral. Montani lifted his target for the stock to $220 from $205 while Nedialkova is sticking with her price target of $243.
At about 2 p.m., Dollar General shares (Ticker: DG) were changing hands around $197.50, up 2 percent on the day. Since falling nearly 5 percent Thursday on the heels of the company’s fourth-quarter results and execs’ issuance of 2021 guidance, they have rallied about 10 percent.
Montani told clients Monday that Dollar General CEO Todd Vasos and his team have done a good job in the past 18 months growing market share and that he expects they will continue to be able to do that. With investors now expecting slower relative growth from the company as the broader economy rebounds, he added, the stock now presents a favorable risk-reward dynamic.
The upgrades from Montani and Nedialkova bring their ratings in line with those of most other analysts following Dollar General. Since late last week, six of their peers lowered their targets for the stock by an average of nearly 10 percent.
The Street’s average price target for the stock is a shade under $230.