UPDATE: Bank of America Reiterates Buy Rating on Dollar General on Long Term Positives

In a report published on Friday, Bank of America analyst Denise Chai reiterated a Buy rating on Dollar General (NYSE: DG) and maintained a $68 price objective.

In the report, Bank of America commented that, "Earlier this month, we upgraded DG from Neutral back to Buy, as we expect long- term positives to outweigh shorter-term headwinds. Specifically, DG's recent credit rating upgrade, debt refinancing and near lifting of the private equity overhang (now only ~6.5%) are all positives which we believe will continue to strengthen sentiment toward the stock. Despite near-term margin and comp headwinds, we think DG's prospects remain attractive, with 6-7% square footage growth, 3-5% comps, EBIT margin expansion and growing capital return. We note that our 2013 EPS estimate of $3.35 remains $0.05 ahead of $3.15-3.30 guidance. Further, in our opinion, we think the initiation of a dividend in the future would be another positive catalyst."

Dollar General closed on Thursday at $53.67.