Dollar General Stock Dips on BofA Bear Note

The equity is down 5% year-to-date

Assistant Editor
May 24, 2021 at 10:54 AM
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The shares of Dollar General Corp. (NYSE:DG) are down 2.5% at $199.84 at last check, following a downgrade to "underperform" from "neutral" at Bank of America Securities, as well as a price-target cut to $190 from $185. The brokerage firm listed several reasons for the hefty bear note, including higher gas prices and convenience store traffic, as well as grocery store promotions, to name just a few. 

On the charts, Dollar General stock has steadily worked its way lower since surging to the $222 level earlier in May, which is just shy of its Oct.16 all-time high of $224.71. Down 5% year-to-date, DG is risking a close below the 80-day moving average, after standing firmly above the trendline for almost two months.

Analysts were majorly optimistic towards the equity coming into today, with 12 of the 16 in coverage calling it a "buy" or better, while the remaining four said "hold." Echoing this, the stock's 12-month consensus target price of $234.57 is a 17.4% premium to current levels.

Today's options pits are bearish, on the other hand. So far, 2,467 puts have crossed the tape, which is four times what is typically seen at this point. The weekly 5/28 205-strike put is the most popular, followed by the 187.50 strike-put in the same series, with new positions currently being opened at the former.

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