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Dollar General (DG) Laps the Stock Market: Here's Why

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The latest trading session saw Dollar General (DG - Free Report) ending at $77.27, denoting a +1.32% adjustment from its last day's close. The stock exceeded the S&P 500, which registered a gain of 0.56% for the day. Meanwhile, the Dow gained 0.42%, and the Nasdaq, a tech-heavy index, added 0.83%.

Coming into today, shares of the discount retailer had lost 4.72% in the past month. In that same time, the Retail-Wholesale sector gained 5.95%, while the S&P 500 gained 3.11%.

Market participants will be closely following the financial results of Dollar General in its upcoming release. The company plans to announce its earnings on December 5, 2024. The company's upcoming EPS is projected at $0.96, signifying a 23.81% drop compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $10.14 billion, showing a 4.56% escalation compared to the year-ago quarter.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $5.85 per share and revenue of $40.51 billion. These totals would mark changes of -22.52% and +4.71%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Dollar General. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.11% lower. Right now, Dollar General possesses a Zacks Rank of #3 (Hold).

Digging into valuation, Dollar General currently has a Forward P/E ratio of 13.04. This denotes a discount relative to the industry's average Forward P/E of 21.07.

One should further note that DG currently holds a PEG ratio of 2.23. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Retail - Discount Stores industry currently had an average PEG ratio of 2.56 as of yesterday's close.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 169, putting it in the bottom 33% of all 250+ industries.

The Zacks Industry Rank is ordered 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.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.


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