BMO Capital Markets downgraded shares of Dollar General to market perform from outperform, saying the discount chain has fully priced in recession expectations. "We believe valuation is close to peak levels on recessionary comps," analyst Kelly Bania wrote in a Monday note. "Despite our belief that DG's execution remains strong and our expectation for an acceleration in comps as DG benefits from a more price sensitive environment, we believe this strong outlook is accurately reflected in the shares at this time," Bania added. Investors have piled into Dollar General this year as they monitored mounting inflationary pressures that would spur consumers to trade down to the discount retailer. The dollar store is up 7% year to date, and 3% below its 52-week high, outperforming the S & P 500 and the other major averages. Still, the analyst set a $265 price target for Dollar General, implying just 4.6% upside to Friday's closing price of $253.30. Bania sees "modest risks" ahead that make it difficult to be more bullish on Dollar General. The analyst said the recent drawdown in gas prices, and an "extremely promotional" retail environment, "may limit the magnitude of trade-down that DG benefits from relative to expectations." "[Given] the significant outperformance and potentially high expectations, we see a more balanced risk reward in DG shares at this point and would look for a better re-entry point," the note read. Bania expects there is more upside in competitor Dollar Tree . — CNBC's Michael Bloom contributed to this report.