DCF Studio

    DG · NYQ · Consumer Defensive

    Dollar General Corporation

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 201.56

    Market price

    USD 135.78

    Implied upside

    +48.4%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2026-01-31

    AdjustedCapital expenditure runs at 3.7% of revenue against depreciation of 2.2%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD 201.56+48.4%
    Exit multiple
    USD 195.43+43.9%
    Market price
    USD 135.78

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn3bnFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36
    Nominal FCFFDiscounted to todayUSD
    LineFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36CAGR
    RevenueUSD 44.5bnUSD 46.4bnUSD 48.1bnUSD 49.9bnUSD 51.6bnUSD 53.3bnUSD 55.0bnUSD 56.5bnUSD 58.1bnUSD 59.5bn+3.3%
    EBITUSD 2.7bnUSD 2.8bnUSD 2.9bnUSD 3.1bnUSD 3.2bnUSD 3.3bnUSD 3.4bnUSD 3.5bnUSD 3.6bnUSD 3.6bn+3.3%
    NOPATUSD 2.2bnUSD 2.2bnUSD 2.3bnUSD 2.4bnUSD 2.5bnUSD 2.6bnUSD 2.7bnUSD 2.7bnUSD 2.8bnUSD 2.9bn+3.3%
    Add depreciation & amortisationUSD 996.8mUSD 1.0bnUSD 1.1bnUSD 1.1bnUSD 1.2bnUSD 1.2bnUSD 1.2bnUSD 1.3bnUSD 1.3bnUSD 1.3bn+3.3%
    Less capital expenditureUSD -1.6bnUSD -1.7bnUSD -1.7bnUSD -1.7bnUSD -1.8bnUSD -1.8bnUSD -1.8bnUSD -1.8bnUSD -1.8bnUSD -1.9bn+1.5%
    Capex, % of revenue3.7%3.6%3.5%3.5%3.4%3.4%3.3%3.2%3.2%3.1%-
    Less increase in working capitalUSD 545.2mUSD 539.3mUSD 534.4mUSD 527.1mUSD 517.5mUSD 505.6mUSD 491.3mUSD 474.6mUSD 455.6mUSD 434.3m+2.5%
    Free cashflow to firmUSD 2.1bnUSD 2.1bnUSD 2.2bnUSD 2.3bnUSD 2.4bnUSD 2.5bnUSD 2.6bnUSD 2.6bnUSD 2.7bnUSD 2.8bn+3.4%
    Discount factor0.97170.91740.86610.81770.77200.72880.68810.64960.61330.5791-
    Present valueUSD 2.0bnUSD 2.0bnUSD 1.9bnUSD 1.9bnUSD 1.9bnUSD 1.8bnUSD 1.8bnUSD 1.7bnUSD 1.7bnUSD 1.6bn-
    Present Value Of The ForecastUSD 18.2bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.458Reported 0.191, pulled toward 1.0 (Blume)
    Cost of equity6.83%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 9.6x interest cover. Book interest / average debt was lower, at 1.4%.
    Market capitalisationUSD 30.0bn65.6% of capital
    Total debtUSD 15.7bn34.4% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC5.92%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 201.56

    69% of EV

    Forecast FCFF, final year
    USD 2.8bn
    Capex at depreciation, working capital in reinvestment
    USD 2.9bn
    Less reinvestment at g/ROIC (18.3% of NOPAT)
    USD -526.4m
    Capitalised
    USD 2.4bn
    ROIC (reported)
    13.7%
    Terminal value, undiscounted
    USD 70.5bn
    Terminal value, discounted
    USD 40.8bn
    Enterprise value
    USD 59.1bn
    Less net debt
    USD 14.6bn
    Equity value
    USD 44.5bn

    Exit at 13.7x EBITDA

    Value per shareUSD 195.43

    68% of EV

    Terminal value, undiscounted
    USD 68.2bn
    Terminal value, discounted
    USD 39.5bn
    Enterprise value
    USD 57.7bn
    Less net debt
    USD 14.6bn
    Equity value
    USD 43.2bn

    Spread between methods: 3%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    3.92%366.07436.93558.68814.301682.41
    4.92%242.03268.54306.54365.01465.58
    5.92%173.98185.85201.56223.06253.95
    6.92%130.94136.63143.86153.24165.70
    7.92%101.23103.92107.30111.60117.11

    Outlined: this model. Green text: above today's price of 135.78. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year4.1%3.4%0.8%
    EBIT margin8.8%6.1%4.6%
    Discount rate-5.9%7.1%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.