3 Retail Stocks to Buy Ahead of Earnings This Week

Looking ahead to the upcoming earnings reports, its hard not to be drawn to the retail industry. The docket includes some of the most intriguing stories of winners in what’s become a very unusual shopping environment in 2020. 

Far from flashy, these defensive stocks are all major beneficiaries of the pandemic economy—and are all poised to produce the type of growth not typically seen in the consumer non-cyclical space.

Will Dollar General Reach a New High?

Dollar General (NYSE:DG) reports before the market open on December 3rd. The consensus EPS estimate is $1.97 which represents 39% year-over-year growth.

The last eight analysts to chime in on Dollar General stock have either reiterated or initiated ‘buy’ ratings. Earlier this week Wells Fargo and Oppenheimer confirmed price targets of $250 and $240 respectively.

There’s good reason to be bullish about the discount retailer. Most of its sales come from the consumables category which includes food, cleaning supplies, and health and beauty products. This makes its roughly 17,000 locations a convenient one-stop for pandemic-driven shoppers.

Unlike its main competitor Dollar Tree which prices all items at $1, Dollar General sells some things for a buck but most merchandise goes for under $10. The higher-priced items are often multipacks and bulk items which makes Dollar General sort of a miniature version of Costco. More importantly, this model opens the company to a broader customer demographic.

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