DG
Dollar General Corporation
$115.15
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Fair Value
Trading 7.0% below fair value
You pay
$115.15
Bear
$108.37
Fair
$123.86
Bull
$139.34
Bear
$108.37
-5.9%
$7.27 × 14x P/E
Fair
$123.86
+7.6%
$7.27 × 16x P/E
Bull
$139.34
+21.0%
$7.27 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
15.8x
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 $137.89 from 51 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $123.86 per share.
Warnings
Dividend-based valuation: $61.32 (below our primary estimate by 47%). Large gaps may signal the dividend doesn't reflect full earning power.
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