DG
Dollar General Corporation
$105.65
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Fair Value
Trading 16.4% below fair value
You pay
$105.65
Bear
$110.56
Fair
$126.35
Bull
$142.15
Bear
$110.56
+4.6%
$7.27 × 14x P/E
Fair
$126.35
+19.6%
$7.27 × 16x P/E
Bull
$142.15
+34.5%
$7.27 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
14.5x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $145.00 from 50 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $126.35 per share.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples