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Dollar General (DG) Gains As Market Dips: What You Should Know

Dollar General (DG) closed at $234.17 in the latest trading session, marking a +0.79% move from the prior day. This move outpaced the S&P 500's daily loss of 0.4%. At the same time, the Dow added 0.08%, and the tech-heavy Nasdaq lost 0.19%.

Coming into today, shares of the discount retailer had lost 6.61% in the past month. In that same time, the Retail-Wholesale sector lost 15.28%, while the S&P 500 lost 9.39%.

Wall Street will be looking for positivity from Dollar General as it approaches its next earnings report date. This is expected to be May 26, 2022. In that report, analysts expect Dollar General to post earnings of $2.33 per share. This would mark a year-over-year decline of 17.38%. Our most recent consensus estimate is calling for quarterly revenue of $8.7 billion, up 3.51% from the year-ago period.

DG's full-year Zacks Consensus Estimates are calling for earnings of $11.48 per share and revenue of $37.39 billion. These results would represent year-over-year changes of +12.88% and +9.26%, respectively.

Investors should also note any recent changes to analyst estimates for Dollar General. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Dollar General currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, Dollar General is holding a Forward P/E ratio of 20.25. This represents a premium compared to its industry's average Forward P/E of 19.19.

Also, we should mention that DG has a PEG ratio of 1.76. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Retail - Discount Stores stocks are, on average, holding a PEG ratio of 1.75 based on yesterday's closing prices.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 84, putting it in the top 34% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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