DG
Dollar General Corporation
$134.43
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 22.7% above fair value
You pay
$134.43
Bear
$95.90
Fair
$109.60
Bull
$123.30
Bear
$95.90
-28.7%
$6.85 × 14x P/E
Fair
$109.60
-18.5%
$6.85 × 16x P/E
Bull
$123.30
-8.3%
$6.85 × 18x P/E
Adjust Assumptions
16.0x
6.85$
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
19.6x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (52 analysts)
$137.27
Divergence from AlphaVal
20%
Summary
Applying a 16x P/E to adjusted EPS of $6.85, the base-case value is $109.60 per share. DDM cross-check: $45.34.
Warnings
Dividend-based valuation: $45.34 (below our primary estimate by 59%). 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