Dollar General: Undervalued Walmart in a Downcycle? (Part 3)

With investors being willing to pay 26x PE for $WMT for its low-risk & highly predictable cash flows, what PE multiple could $DG inflate to one day? (current: 13.6x norm.)

With investors being willing to pay 26x PE today for WMT 0.00%↑ for its low-risk and highly predictable cash flows, do you think DG’s multiple could one day inflate to that level, with the aforementioned future growth? Perhaps when the next retail industry upcycle inevitably arrives?

“If $DG's Operating Margins can recover back to historical levels, the potential upside is obvious. The entire valuation exercise hinges on whether DG’s underperformance in 2023 is structural or cyclical. That’s what we’re here to determine.”

Chapters

1. 🧠 AI-Generated: 500-Word Summary of this Report

2. Dollar General: Financial Background (Part 1)

3. Reasons Behind Recent ST Underperformance (-45% YTD) (Part 1)

4. $DG Fundamental Analysis: Business Level, Store Unit Economics & ROIC (Part 2)

5. Financial Statement Analysis (Part 2)

6. Growth

   1. Sources of Revenue Growth

   2. Estimating Normalized Net Margin

7. Asymmetric Risk:Reward: Low Risk & Valuation

8. ⬇️ Download Dollar General 3-Statement Model here!

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🧠 AI-Generated: 500-Word Summary of this report