(DG) Dollar General: FBR Capital's 1Q12 review -- Fundamentals remain strong; pressure from secondary should be temporary (Stock Price: 48.49)
FBR Capital notes sales trends remained strong as the EPS beat was driven
by comp sales of 6.7% vs. the Street consensus 5.1%. They believe the raised
guidance is very achievable, and they would not be surprised to see DG
ultimately deliver above the range. Shares are likely to see temporary pressure
due to the concurrent announcement of a 25M share secondary offering by DG's
legacy private equity holders. Given the current fundamental strength, and their
belief that trends are likely to remain strong, they would accumulate shares,
especially if there is any weakness. They see the downside as very limited. DG
is at $46.96 in the premarket
(DG) MARKET TALK: Dollar General Drop Called Opportunity By BMOJun 5 at 07:56
Profile hits: NONE
7:56 - Dollar General (DG) off 3.6% to $46.75 premarket after F1Q
earnings rose 36%, but the deep discounter unveiled plans for a secondary
offering and did not raise its 3%-5% full-year comparable-store sales guidance
following a 6.7% increase in 1Q. BMO Capital Markets recommends buying on the
weakness. "We think management is just being cautious in its outlook based on
better weather that could have pulled forward sales as well as the uncertain
macro (economic) environment, and we look for 4% to 5% comp growth in the
remaining quarters," firm says. "Further, we expect the company to hold an
upbeat analyst meeting" on June 26. (karen.talley@dowjones.com)
(DG) Dollar General: Hearing target raised to $60 from $51 at boutique firm following Q1 results (Stock Price: 48.49) Jun 5 at 08:56
(DG) Dollar General price target raised to $60 from $51 at Buckingham Jun 5 at 08:55
Profile hits: QU2
DISCLOSURE: Long (DG)
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