Dollar General Corp (NYSE:DG) stock is 0.5% higher to trade at $133.85 at last glance, after J.P. Morgan Securities upgraded the discount retailer to "overweight" from "neutral" and hiked its price target to $166 from $128. The brokerage expects the company to continue to grow sales over the next few years, and noted the opening of new stores, remodeling of current ones, and a solid macro backdrop.
DG secured a fresh 52-week high of $135.52 out of the gate, on track for a fifth-straight gain. The shares are fresh off a third consecutive week in the black and sport a more than 78% lead for 2025, trading comfortably above all short- and long-term moving averages.
There is plenty of room for additional bull notes, as 17 of 29 firms in coverage carried a "hold" rating coming into today. Plus, the 12-month consensus target price of $132.16 is a 1.7% discount to current levels. There's short squeeze potential too; bearish bets have increased by 33%, and the 12.34 million shares sold short accounts for 5.6% of DG's available float.
Short-term options traders lean more bearish than usual. This is per DG's Schaeffer's put/call open interest ratio (SOIR) of 1.18, which ranks just 5% shy of annual peak. An unwinding of this pessimism could generate additional tailwinds for the equity moving forward.
Now looks like an excellent time to weigh in on the stock's next moves with options, too, as its Schaeffer's Volatility Index (SVI) of 20% sits higher than just 11% of readings from the last year. In other words, options are affordably priced at the moment.
