UPDATE: Morgan Stanley Initiates Duke Energy at Overweight on Total Return Potential

Morgan Stanley initiated coverage on Duke Energy DUK with an Overweight rating and a $72.50 price target. Morgan Stanley noted, "DUK has one of the more attractive value propositions among large-cap regulated utilities, in our view. The stock trades at a ~5% discount to large-cap peers on 2014e P/E. We think it should trade at a premium as it is the most liquid utility stock (with $45bn market cap) and is evolving into one of the more defensive names in the sector. We expect Duke to address its many uncertainties over the next 12 months, show strong EPS growth of 4-6% post-2013, and offer a dividend yield of 4.8%, the highest among its peers." Duke Energy closed at $64.32 on Friday.