12:35 PM EDT, 03/14/2024 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We trim our 12-month target by $1 to $172, 23.6x our FY 2025 (Jan.) EPS of $7.30 (cut from $8.44) or 20.2x our newly initiated FY 2026 EPS of $8.51 vs. the 20x long-term average forward P/E. FQ4 (Jan-Q) EPS of $1.83 (-38% Y/Y) beat by $0.10. Same-store sales surprisingly grew 0.7% Y/Y vs. the -1.2% consensus. However, margins were weaker than expected, and FY 2025 guidance was mixed. Margin expansion and EPS growth in FY 2025 will likely be back-end weighted, as DG laps labor investments and begins to realize benefits related to shrink and supply chain initiatives. The path back to 7%-8% operating margins will likely take a bit longer than previously expected, given ongoing shrink and sales mix headwinds and an intensifying promotional environment. That said, we believe DG is on the right track to profitable growth, with the potential to return to 10%+ EPS growth in FY 2026. Longer-term drivers for margin expansion include DG Media Network, private label penetration, and the rollout of more pOpShelf stores.