Dollar General Corporation (NYSE: DG) shares rose 1.7% in Thursday premarket trading. HSBC analyst Daniela Bretthauer upgraded the stock from Hold to Buy. The analyst increased the price target from $125.00 to $160.00.
HSBC reports that the current valuation does not fully reflect the retailer's turnaround potential. The stock currently trades at the low end of its historical range. The revised valuation applies a higher price-to-earnings multiple to updated future earnings per share estimates.
Dollar General is currently prioritizing store investments and e-commerce expansion to drive growth. The company recently launched a same-day delivery partnership with Instacart to broaden its digital reach. The retailer also expanded its holiday assortment with affordable toys to assist budget-conscious families.