Dollar General: JPMorgan slashes price target after middling Q3

Investing.com– JPMorgan slashed its price target on Dollar General Corporation (NYSE:DG) after the discount retailer clocked weaker-than-expected third-quarter earnings and trimmed its annual profit forecast. 

JPM cut its PT to $66 from $82, while maintaining Dollar General at Neutral. 

The brokerage said while it did see earnings growth in 2024, it expects the retailer to face increased margins pressure in the coming years amid higher expenses and more markdowns.

Dollar General warned on Thursday that profit margins will be pressured by increased discounts during the holiday season, while consumers were also growing more cost conscious. 

The firm clocked Q3 earnings per share of $0.89, below street estimates of $0.94, but posted better-than-expected net sales.

Dollar General trimmed its annual sales and profit forecast citing increased margin pressure. Management also cited repair costs related to recent hurricane activity in the country. 

JPM expects the firm to clock below-consensus earnings in 2025, while expenses are also expected to increase next year as the firm remodels a bulk of its stores. 

Dollar General shares fell slightly in aftermarket trade, after recouping all of their post-earnings losses on Thursday.