July 4, 2022

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Why Morgan Stanley Says Dollar General Is A Good Defensive Play

Although Dollar Standard Corp’s (NYSE:DG) stock has outperformed the industry yr-to-date, it has performed in-line with other defensive shares, according to Morgan Stanley.

The Greenback Typical Analyst: Simeon Gutman upgraded Greenback Normal from Equivalent-Body weight to Obese though elevating the selling price target from $225 to $250.

The Greenback Typical Takeaways: The stock could continue to outperform in a extended downturn supplied the company’s materials earnings and valuation upside, Gutman stated in the upgrade note.

“Even if the economic climate will not enter a recession, the small business is an earnings compounder, there are quite a few idiosyncratic catalysts/initiatives, DG’s margin trajectory is much more resilient than we appreciated moving into the year, and we foresee a extra complicated upcoming 6-12 months for a lot of Retail supplied wallet share shifts,” the analyst explained. “So there are multiple techniques for DG to outperform,” he extra.

“DG fits our concept of favoring high-quality, defensive stores with offensive attributes, It is arguably our most defensive, counter-cyclical company,” Gutman even more claimed.

DG Value Action: Shares of Dollar Standard experienced declined by .87% to $230.24 at the time of publication Thursday.

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