CIBC Ups Dollar General to 'Sector Performer'

Analyst Dan Wewer sees significant improvement in the discount retailer's gross margin, inventory, and operating return on assets

CIBC World upgraded Dollar General (DG ) to sector performer.

Analyst Dan Wewer says he upgraded from sector underperformer based on a significant improvement in gross margin, inventory turn, and operating return on assets. He says first-quarter earnings per share results were 2 cents better than consensus. He says balance sheet trends are excellent, capital efficiency continues to improve, and operating return on assets rose 74 basis points sequentially to 19.7%.

Wewer raised the 84 cents fiscal 2004 (Jan) earnings per share estimate to 86 cents, and upped the 95 cents fiscal 2005 estimate to 97 cents.

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