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Citi analyst Paul Lejuez downgraded Dollar General (NYSE:DG) from Buy to Neutral in a note to investors Thursday, maintaining a $258 per share price target on the stock.
The stock is within 4% of Citi’s price target. Lejuez wrote that although the company announced a CEO transition this week with COO Jeffery Owen moving into the CEO seat, they believe the transition will be smooth and it does not impact their view on the stock.
“While DG is a defensive stock to own in an uncertain environment, trading at 14.1x F23E EBITDA, we believe many appreciate its defensive characteristics, and as a result DG screens as one of the more crowded longs in our universe,” the analyst wrote.
Despite continuing to believe Dollar General is “well-positioned in the current retail landscape both near term and long term,” due to the fact that it is “only one of two stocks up on a 3, 6 and 12-month basis (BJ is the other), expectations seem high and upside seems more limited from here,” added Lejuez.
