Dollar General
Shares of Dollar General Corp. (NYSE: DG) have risen by about 5% over the past 12 months, including a drop of 12.5% for the year to date. The off-price retailer lowered its same-store sales and EPS forecasts late last month. Some locations in Virginia and North Carolina have had to close temporarily in recent weeks to rearrange merchandise that local fire departments said clogged store aisles and needed to be cleared for safety reasons. Not a good look.
Analysts remain mostly bullish on the stock. Of 29 brokerages covering the off-price retailer, 19 have a Buy or Strong Buy rating and nine more rate the shares a Hold. At a price of around $215.50 a share, the upside potential based on a median price target of $249.00 is 15.5%. At the high price target of $288.00, the upside potential is 33.6%.
Fourth-quarter revenue is forecast at $10.24 billion, up 8.2 sequentially and by 18.4% year over year. Adjusted earnings per share (EPS) are forecast at $2.96, up 26.9% sequentially and 15.2% higher year over year. For the full 2023 fiscal year that ended in January, Dollar General is expected to report EPS of $10.71, up 5.3%, on sales of $37.89 billion, up 10.7%.
The company’s shares traded at 20.1 times expected 2023 EPS, 18.9 times estimated 2024 earnings of $11.41 and 16.8 times estimated 2025 earnings of $12.84 per share. The stock’s 52-week range is $183.25 to $262.20. Dollar General pays an annual dividend of $2.20 (yield of 1.01%). Total shareholder return for the past year is 4.22%.
KE Holdings
KE Holdings Inc. (NYSE: BEKE) is a Beijing-based online real estate brokerage. Its share price is up about 74% over the past 12 months. Much of that growth has come in 2023. Lifting the strict COVID-19 lockdowns boosted the fortunes of KE among hedge fund managers. The stock posted the second-largest gain in hedge fund activity (behind only Tesla) in the first two months of this year.
Of 18 analysts covering the stock, 17 have a Buy or Strong Buy rating and the other has a Hold rating. At a share price of around $17.50, the stock’s implied upside based on a median price target of $23.09 is about 32%. At the high price target of $30.94, the upside potential is 77%.
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