Dollar General stock slips after downgrade from Citi
Justin Sullivan

Dollar General (NYSE:DG) shares dipped in Thursdayâs premarket trading after a downgrade from Citi analyst Paul Lejuez advised upside is largely already priced in.
He explained in a note to clients that while the stock is undoubtedly a popular and prudent play ahead of an anticipated recession, its valuation is becoming stretched. The stock has rocketed higher from some turbulence in mid-May, jumping over 30% from its nadir at the end of the spring. Since that point, Lejuez noted the stock has become âone of the most crowded longsâ in his coverage universe.
âWe continue to believe DG is well positioned in the current retail landscape both near term and long term, but as one of only 2 stocks that is up on a 3, 6 and 12 month basis, expectations seem high and upside seems more limited from here,â he concluded, cutting his rating from âBuyâ to âNeutralâ.
Shares of the Tennessee-based discount retailer fell 2.69% in premarket hours.
To be sure, Lejuez remained confident in discount stores amid market turmoil. At present, he advised Dollar Tree (NASDAQ:DLTR) offers more upside than Dollar General (DG).
âWe believe Dollar Tree (DLTR) cleaning up its executive suite is a positive change that will result in a better managed organization,â he told clients. âIn addition, with Dollar Tree (DLTR) trading at ~10.5x our F23E EBITDA, we believe the risk/reward is more attractive than Dollar General (DG) at current levels.â
He maintained a âBuyâ rating on shares and a $190 price target on shares of Dollar Tree. 
Read more on the recent executive transition at Dollar General.