UPDATE: Morgan Stanley Initiates Coverage on Santander Consumer USA Holdings with Overweight Rating, $29 PT as Multiple Factors Drive Growth

In a report published Tuesday, Morgan Stanley analyst Cheryl M. Pate initiated coverage on Santander Consumer USA Holdings SC with an Overweight rating and $29.00 price target. In the report, Morgan Stanley noted, “Initiating coverage of SC at Overweight with a $29 price target. Santander Consumer USA is an established player in the nonprime auto finance industry with an attractive mid-20% ROE profile and significant growth and diversification opportunities. We see key opportunities in the near term from increasing market penetration in Chrysler Capital, and longer term from platform diversification. We forecast a 12% 3-year EPS CAGR through 2016 and see 12% upside to our price target from current levels, based on 11.6x 2015e EPS.” Santander Consumer USA Holdings closed on Monday at $25.90.