HSBC analysts upgraded shares of Dollar General (NYSE:DG) to Hold from Reduce, maintaining a $102 per share price target in a recent note to clients.
The analysts told investors they hope DG can get back on track under new leadership after the company announced the election of Todd Vasos to replace Jeff Owen as its new CEO, while they also believe the shares have hit their bottom.
"Mr Vasos previously served as Dollar General's CEO from June 2015 to November 2022 and his tenure was marked by a significant transformation, accelerated growth and innovation," the HSBC analysts noted.
DG also updated its guidance for 2023, where it once again lowered its sales growth and EPS expectations.
"Although we are not changing estimates or target price, as our estimates are still very much aligned with the new guidance in sales and EPS announced today, we are upgrading the shares to Hold from Reduce," wrote the analysts.
"We believe that all the bad news is already priced in at these levels and now find the risk/reward more attractive, as the stock is trading at 2024e PE of 13x, which is a 30% discount to its 10-year average trading multiple."