UPDATE: Morgan Stanley Initiates Coverage On Dollar General

In a note dated June 24, Morgan Stanley analyst, Vincent Sinisi initiated coverage on Dollar General DG with an Equal-weight rating and a $68 price target.

Sinisi provided EPS estimates for 2015 to 2017 of $4.10, $4.78 and $5.54, which are $0.04, $0.04 and $0.11 above consensus, respectively. These estimates reflect his expectations for consistent sales growth and positive EBIT margin inflection. Furthermore, Sinisi believes the company's solid share buyback program will continue to be a driver of EPS growth.

Looking forward, Sinisi is optimistic about the company's plan to expand its assortment of non-consumable goods priced between $1 - $5 as part of its Everyday Low Price strategy.

Despite the optimistic tone of his note, Sinisi commented, "Dollar General lacks near-term catalysts, and we await signs of an improved lower-end consumer macro environment to drive upside."