Five Below is slumping after hours Wednesday.
The discount retailer tumbled 6% in extended hours after falling short of analysts’ revenue estimates in its recent quarter. Dollar General and Dollar Tree are due to release their results Thursday morning.
Mark Tepper, president of Strategic Wealth Partners, says one name is best positioned to perform better than its peers – Dollar General. He notes that the majority of its revenue comes from perishables such as food and home products, while its geographical footprint in rural areas means it has a strong presence in many markets.
“Management’s doing an awesome job managing prices, costs, inventory, and of all these names, Dollar General is the least exposed to tariffs,” said Tepper on CNBC’s “Trading Nation ” on Wednesday.. “We’re letting our position ride. But if this thing would pull back to about $125 on an expectations miss, we’d be buying a heck of a lot more.”
A move to $125 implies 11% downside from current levels. That would also mark its lowest level since May.
Ari Wald, head of technical analysis at Oppenheimer, sees further upside for Dollar General.
“Here’s a stock rated outperform by our fundamental analysts and a stock that continues to maintain its bullish trend,” said Wald on CNBC’s “Trading Nation.”
Oppenheimer’s $150 price target suggests a 6% rally. It would also take it up to new highs.
“The standout chart here is Dollar General relative to the S&P 500, breaking through multiyear resistance dating back to the year 2016. That argues for continued leadership in this stock, it’s got good momentum behind it. Good trend. Dollar General, we’re buyers,” he said.
Disclosure: Strategic Wealth Partners holds Dollar General.
