UPDATE: Morgan Stanley Upgrades Time Warner to Overweight, Raises PT Following Time Inc. Spin-Off

In a report published Thursday, Morgan Stanley analyst Benjamin Swinburne upgraded the rating on

from Equal-Weight to Overweight, and raised the price target from $70.00 to $72.00. In the report, Morgan Stanley noted, “Following the Time Inc. spin-off, TWX will have fully shed its media conglomerate clothes and emerged as a concentrated bet on global TV growth. We expect the Turner Networks re-pricing cycle and a healthy dose of financial leverage to drive 8%+ EBIT growth and 15-20% EPS growth annually, with less variability vs. peers. Our base case assumes net leverage holds at ~2.5x, though post-spin-TWX has additional capacity, creating potential for upside.” Time Warner closed on Wednesday at $63.34.