JPMorgan analysts downgraded Dollar General (NYSE:DG) to Underweight from Neutral and reduced the price target to $116.00 from $132.00.

The bank’s rationale includes the financial stress faced by Dollar General’s core customer base, with an average household income of $35,000. This strain results from factors like dwindling pandemic-related savings, ongoing inflationary pressures (a 12% increase over a 2-year period), and a reduction of about $40 billion in government assistance. Furthermore, Dollar General’s management foresees middle-income customers depleting their excess savings by the end of Fall 2023 due to upcoming student loan repayments, higher interest rates, and rising fuel costs.

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