UPDATE: Morgan Stanley Upgrades Responsys, Current Position to Benefit from Multiple Trends

In a report published Wednesday, Morgan Stanley analyst Jennifer Swanson Lowe upgraded the rating on

(NASDAQ MKTG) from Equal-Weight to Overweight, and named a $19.00 price target. In the report, Morgan Stanley noted, “MKTG is positioned to benefit from a number of trends, including increased spending on interactive marketing and growing interest in SaaS, while a 40% increase in sales capacity should also put upward pressure on revenue growth. The setup for top line revenue growth is favorable as new sales capacity ramps, but Street numbers are conservative, looking for growth to decelerate from 26% in H113 to 17% in H2 despite easing comps, and 18% growth in CY14. We see room for upside. Despite upside potential, the stock looks cheap at 3.0x EV/CY14 Sales or 0.17x EV/Sales Growth vs. the SaaS group median of 7.6x/0.27x. MKTG has delivered mixed results in the past so some discount is warranted, but we believe the current discount is too high and see room for the stock to work higher as MKTG exceeds a low bar.” Responsys closed on Tuesday at $14.90.