Guggenheim reiterated a Buy rating and $125 price target on Dollar General (NYSE: DG).

The firm noted that although the shares had significantly outperformed this year—helped by EBIT recovery tied to lower shrink expenses—the stock still traded at a reasonable 8.2x Guggenheim's 2026E EBITDA estimate. The analyst expected upcoming developments to support additional upside, including potentially solid third-quarter results, a raised full-year outlook, and details on the retailer's 2026 remodel-focused real estate strategy during its December 4 update.

Guggenheim said Street expectations for 2026 earnings looked conservative, especially with the potential for easing LIFO and interest expenses and a reduced share count—even assuming a mostly flat EBIT margin. The firm acknowledged challenges in achieving Dollar General's long-term 6%-7% EBIT margin target, particularly after shrink normalizes in the first half of 2026. Still, Guggenheim retained its Buy rating until near-term catalysts fully play out.