Bank of America sees room for Dollar General to run as earnings near. Analyst Robert Ohmes lifted his price target by $15 to $115, suggesting shares can jump 14.3% above Thursday’s close. That marks a new high for price targets on the discount retailer among analysts on Wall Street, according to LSEG. “With the stock at a discount to historical levels & peers, we believe competitive & expense risks are fully reflected in the stock price,” Ohmes wrote to clients in a note. “Increasing visibility on strategic initiatives and share gains from competitor store closures provide a favorable setup for comp & profitability improvement into 2025, particularly in 2H.” Ohmes also reiterated his buy rating. That makes him an outlier on the Street, with the majority of analysts surveyed by LSEG having a hold rating. He sees $1.40 in adjusted earnings per share and 1% growth in comparable store sales. Ohmes also said the bank has observed accelerating sales data in the first quarter despite flat estimates, which points to potential for upside. Dollar General is expected to report earnings on June 3. Additionally, the analyst said he has confidence that the Tennessee-based company’s “back to basics” strategy is working. While he said bears may point to Walmart’s outperformance, Ohmes said Dollar General’s price gaps compared with competitors and expanding digital presence can provide tailwinds. Store closures from competitors can also give the company an edge, he said. The stock has rallied more than 32% this year, on track for its first positive year in three.
