Dollar store stocks seen as strong plays in current macro backdrop
Justin Sullivan/Getty Images News

Guggenheim reiterated a bullish view on Dollar General Corporation (NYSE:DG) after taking in the retailer's Q2 earnings report.
Amid the rough macroeconomic backdrop, the firm thinks Dollar General (DG) is a standout with strong top-line growth and gross margin expansion potential as consumable take priority over discretionary purchases with household spending.
âBottom line, we believe DGâs above-average top- and bottom-line momentum should drive outperformance at least through year-end while DLTRâs superior risk/reward profile should serve investors well beginning in early 2023," updated analyst John Heinbockel
Guggenheim raised its price target on DG to $270 to rep 9% potential for shares, which is more meaningful upside with overall market expectations muted. The average price target on Wall Street on DG is $267.26. Guggenheim also has a favorable view on Dollar Tree (DLTR), with a price target of $170 that implies 14% upside.
Read why Seeking Alpha author DM Martins Research considers Dollar General a Strong Buy.