From Yahoo Finance: 2025-04-14 05:33:00

Dollar General may be a top defensive play for 2025, with a focus on discounted essentials and a stock trading at a deep discount. An analyst upgraded the stock to a “buy” rating with a $110 price target, implying a 27% upside from the current share price of $86.85.

In the fourth quarter, Dollar General reported a 4.5% increase in net sales year over year and a 1.2% rise in same-store sales. The stock’s collapse over the past year may be overdone, as investors could be underestimating its potential for sales growth in a challenging retail environment.

To move higher, Dollar General needs to improve profitability. Fourth-quarter operating profit was halved to $294 million, partly due to store closures and an impairment charge for its pOpshelf business. Management’s back-to-basics strategy aims to boost the bottom line by enhancing inventory efficiency and reducing costs.

Tariffs on foreign imports could benefit Dollar General, as higher prices for imported goods may drive consumers to seek deals. The stock value increased when tariffs were imposed in April, trading at a reasonable 15 times this year’s earnings estimate and offering a 2.71% forward dividend yield.

Understanding the impact of tariffs on consumer spending is crucial, but Dollar General has navigated many economic cycles. With a focus on improving profitability, the stock could potentially reach the analyst’s price target in the near future.

Read more: 1 Wall Street Analyst Thinks Dollar General Stock Is Going to $110. Is It a Buy?