UPDATE: Morgan Stanley Initiates Ship Finance International at Overweight on Growth, Yield

Morgan Stanley initiated coverage on Ship Finance International

with an Overweight rating and an $18.50 price target. Morgan Stanley commented, "We expect SFL to accretively expand and diversify its asset base and cash flow at a time of distress in many shipping markets. We see upside into the high teens, offering total return in excess of 30%. … Initiating coverage of Ship Finance International at Overweight with $18.5 price target; dividend growth is a core objective. SFL's $4.4bn EBITDA backlog and 10.2% dividend yield should offer near-term support. The current tight financing market has reduced access to funding for much of the maritime industry. Given SFL's comparatively easy access to capital, this backdrop has increased the opportunity set for the company's “buy and lease back” business model." Ship Finance International closed at $15.33 on Thursday.