Sector Snap: Dollar Stores
NEW YORK -- A Credit Suisse analyst said Friday that despite big gains over the past few years, he doesn't expect dollar store companies to stop posting significant growth any time soon.
Dollar stores have done well throughout the recession and its aftermath, attracting budget-conscious customers with low prices. They've also promoted themselves as easy to navigate and easy to get to, since they're much smaller than big-box stores like Walmart and Target, and usually have more locations throughout any given city.
Dollar stores can gain still more as consumers remain pressured by the weak economy, said analyst Edward Kelly. He named Family Dollar Stores Inc. as his top pick among the group, rating it at "Outperform" with an $81 price target. The analyst also rated Dollar Tree Inc. at "Outperform" with a $55 target price.
Dollar General Corp. received a "Neutral," because Kelly expects the company's growth to start slowing.
In afternoon trading, Family Dollar shares added 42 cents to $69.07; Dollar Tree shares rose $1.33, or 2.8 percent, to $48.18 and Dollar General shares fell 27 cents to $51.80.