Dollar General price forecast after posting slight FQ3 earnings beat

By:
on Dec 3, 2021
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  • Dollar General shares on Thursday declined by nearly 3%.
  • The company reported its most recent quarterly results before markets opened.
  • Its earnings outperformed estimates while revenue was in line.

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On Thursday, Dollar General Corp (NYSE:DG) shares declined by nearly 3% after announcing its most recent quarterly results. The company reported its most recent quarterly results before markets opened, beating earnings expectations.

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However, revenue for the quarter was in line with Street forecasts. Dollar General also declared a quarterly dividend of $0.42 per share reflecting a forward annual yield of 0.78%.

The company posted FQ3 GAAP earnings per share of $2.08, slightly outperforming the average for analyst expectations of $2.03. On the other hand, revenue for the quarter edged slightly higher by 3.7% from the same quarter a year ago to $8.5 billion, in line with expectations.

Should you bet on growth?

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From an investment perspective, Dollar General shares trade at reasonable trailing 12-month and forward P/E ratios of 20.74 and 19.22, respectively. As a result, the stock could be a compelling option for value investors.

Moreover, analysts expect its EPS to grow by 60% this year before rising at an average annual rate of 6.63% over the next five years. Therefore, it could also gain the attention of growth investors.

Source – TradingView

Technically, Dollar General shares seem to be trading within a descending channel formation in the intraday chart. As a result, the stock has moved closer to the oversold conditions of the 14-day RSI.

Therefore, investors could target potential rebounds at about $225.77, or higher at $235.26. On the other hand, if the decline continues, Dollar General could find support at about $210.46, or lower at $201.08.

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