Dollar General Earnings: Results Still Under Pressure but Long-Term Targets Look Achievable

We don't plan to significantly alter our $115 fair value estimate on narrow-moat Dollar General following the firm's fiscal 2024 fourth-quarter earnings release. Results modestly outpaced our expectations, though management issued a tepid outlook for 2025, with EPS guidance of $5.10-$5.80 coming in below our $6.24 estimates before the earnings call. We anticipate adjusting our near-term outlook to more closely align with management's expectations as the retailer grapples with economic uncertainty and a tough competitive landscape, which should offset benefits from the time value of money. We still think shares are undervalued as we look favorably upon the firm's rural distribution network and a potential profit recovery.