UPDATE: Morgan Stanley Initiates Coverage on AGCO Corporation with Overweight Rating, $73 PT on Multiple Positive Factors

In a report published Thursday, Morgan Stanley analyst Nicole DeBlase initiated coverage on AGCO Corporation AGCO with an Overweight rating and $73.00 price target. In the report, Morgan Stanley noted, “AGCO has historically outperformed DE when the USDA forecasts a Y/Y decline in 1-year forward cash receipts, like today. We expect this phenomenon to drive another year of outperformance in 2014e. Moreover, AGCO share price performance is not highly correlated with US cash receipts, so we see little risk of tough US fundamentals weighing on AGCO stock. We view the recent acquisition of GSI in a positive light, and see strong potential for accelerating top-line growth over the next several years. The company's 10% 2015e operating margin target looks feasible, and is embedded in our bull case. Conservatively, we only assume 9.2% in our base case.” AGCO Corporation closed on Wednesday at $56.77.