The stock of Dollar General Corp. (DG) faced yet another decline early on Friday as Raymond James downgraded the discount retailer in light of its disappointing second-quarter performance.

Although Raymond James lowered its rating for Dollar General by one notch, it still assigned an outperform rating to the stock, indicating its belief that the company is not permanently damaged. According to analyst Bobby Griffin, "we don't think Dollar General is a permanently broken business."

Raymond James uses three ratings: outperform, market perform, and underperform. Its previous rating for Dollar General was strong buy.

The downgrade also comes with a reduced price target for Dollar General, as Raymond James now expects the stock to reach $160 compared to the previous target of $200. This adjustment accounts for factors such as margin pressure from markdowns, theft or shrinkage, and consumer weakness, explained Griffin.

Despite the current disappointment in Dollar General's numbers, Griffin remains optimistic that the company will overcome its cost pressures and eventually experience consistent earnings growth once again.

Investors continued to drive down the price of Dollar General stock on Friday, with a 1.4% drop in premarket trades.

Additionally, Jefferies analysts lowered their price target for Dollar General from $230 to $175 per share.

The decline in stock value on Thursday can be attributed to Dollar General missing its earnings projections, lowering its profit outlook due to lower same-store sales and reduced traffic.

It is worth noting that on August 26, a tragic incident took place in a Dollar General store in Jacksonville, Fla., when a 21-year-old white man carried out a racist attack, resulting in the loss of three Black lives and his own.

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