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    How Diverging Analyst Views On Margins And New Stores At Dollar General (DG) Has Changed Its Investment Story

    Simply Wall St·02/19/2026 19:28:52
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    • In recent weeks, Dollar General has drawn conflicting analyst reactions, with Guggenheim reiterating a positive stance while Rothschild & Co Redburn shifted to a more cautious view due to concerns about sales, margins and new store returns.
    • This split in opinion comes as Dollar General has recently outperformed the broader market despite a multi-year decline in earnings per share alongside rising revenue, highlighting tension between its operational momentum and profitability trends.
    • We’ll now examine how this divergence in analyst views, especially concerns over new store returns and margins, reshapes Dollar General’s investment narrative.

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    Dollar General Investment Narrative Recap

    To own Dollar General, you need to believe its small‑box discount model can keep drawing value focused shoppers even as margins and store level returns face pressure. The key short term catalyst is whether management can stabilize profitability after a multi year decline in earnings per share, while the biggest risk is that continued aggressive expansion delivers weaker returns. Recent bullish and bearish analyst calls highlight valuation debate but do not materially change these core issues yet.

    Rothschild & Co Redburn’s downgrade on concerns over lower new store returns and a weaker margin profile directly challenges the idea that expansion and remodels will reliably lift profitability. That stands in contrast to Guggenheim and others who have raised price targets after a strong share price run, underscoring how differently the same earnings and store performance data can be interpreted when assessing Dollar General’s near term earnings recovery potential.

    Yet behind the strong share price performance, the risk that new stores may not earn their keep is something investors should be aware of...

    Read the full narrative on Dollar General (it's free!)

    Dollar General's narrative projects $46.9 billion revenue and $1.7 billion earnings by 2028. This requires 4.1% yearly revenue growth and about a $0.5 billion earnings increase from $1.2 billion today.

    Uncover how Dollar General's forecasts yield a $139.25 fair value, a 8% downside to its current price.

    Exploring Other Perspectives

    DG 1-Year Stock Price Chart
    DG 1-Year Stock Price Chart

    While recent analyst splits focus on valuation and margin strain, the most optimistic analysts previously expected revenue to reach about US$47,800,000,000 and earnings US$1,800,000,000, which is a far more upbeat margin recovery story than the caution implied by concerns over weaker new store returns, reminding you that opinions can differ sharply and may shift again as this latest news is absorbed.

    Explore 7 other fair value estimates on Dollar General - why the stock might be worth as much as 17% more than the current price!

    The Verdict Is Yours

    Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.