NEW YORK (TheStreet) -- Shares of Dollar General Corp. (DG) were rising, up 0.22% to $73.72 in early market trading Tuesday, after analysts at Goldman Sachs added the discount retailer to the firm's "conviction buy" list this morning.
The company was upgraded to "conviction buy" from "buy" with a higher price target of $87 from $85.
Goldman cited Dollar General's long-term growth driven by the company's robust fundamentals, as well as its attractive valuation.
The firm also pointed to tailwinds from low-income consumers as well as the discount retailer's competitive advantages.
"We note DG has significantly lower import exposure versus Dollar Tree (DLTR), DG sells essentially no produce and limited dairy, and we have already factored wage pressure into our estimates, as we embed less leverage in the out years to incorporate potential wage hikes," Goldman Sachs analysts wrote in a report.
The firm added that its numbers do not factor in the potential upside from consolidation in the dollar store industry.
Goodlettsville, Tenn.-based Dollar General is a discount retailer that sells a selection of merchandise, including consumable products such as food, paper and cleaning products, health and beauty products, pet supplies and tobacco products, as well as non-consumable products.
The company offers merchandise at low prices through 11,215 retail store locations across the country.
Separately, TheStreet Ratings team rates DOLLAR GENERAL CORP as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate DOLLAR GENERAL CORP (DG) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth in earnings per share, increase in net income and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company shows low profit margins."