UPDATE: Credit Suisse Reiterates On Dollar General On Fundamental Opportunity

In a report published Monday, Credit Suisse analyst Edward J. Kelly reiterated an Outperform rating on Dollar General Corp. (NYSE: DG), and raised the price target from $74.00 to $76.00.

In the report, Credit Suisse noted, “DG's performance has trailed other staples retailers as growing uncertainty around its bid for FDO has dominated the headlines. While the ultimate outcome of this transaction is important to the long-term investment thesis, the stock also looks increasingly attractive on a stand-alone basis. Sales and earnings momentum should improve over the next few quarters as comparisons ease, recent headwinds on the low-end consumer seem to be reversing, and the stock's underperformance has pushed valuation to the low end-end of its staples peers. The market seems to view the stock's outlook as binary contingent upon the FDO deal, but we view DG as an attractive risk/reward play overall. Improving fundamental momentum should drive solid near-term performance, while more meaningful upside from a game changing transaction is still a solid possibility. We modestly raised our earnings estimates and our target price to $76 from $74.”

Dollar General closed on Friday at $66.74.