UPDATE: Morgan Stanley Initiates Coverage On GNC On EPS Growth

In a report released Tuesday, Morgan Stanley analyst Simeon Gutman initiated coverage on

with an Equal-weight rating and $39.00 price target. Gutman expects the health supplement retailer to have domestic square footage growth of four to five percent, positive risk/reward skewness, but bottom line growth potentially below average for the next few quarters. Morgan Stanley analysts like GNC's global expansion, multi-channel expansion with its manufacturing and franchise division, opportunity in its e-Commerce site. Gutman claims GNC is currently inexpensive, trading at 10x his 2015 EPS estimate and claims EPS has the potential to grow in the low- to mid-teens as soon as they improve comps.