Morgan Stanley Sees Strong Operating Metrics Underlying Messy 1Q14 for MSCI

In a report published Thursday, Morgan Stanley analyst Toni Kaplan reiterated an Equal-Weight rating and $48.00 price target on

. In the report, Morgan Stanley noted, “MSCI's 1Q14 trends in operating metrics were strong with 90%+ retention in each of the continuing lines of business. Subscription run rate growth of 7.5% was up from 6.2% last quarter, a positive indicator for future performance. While investments will weigh on margins this year, management laid out clear expense guidance at the investor day (reiterated in 1Q results). We continue to be neutral on MSCI, but believe that if the operating environment continues to improve, there could be room for upside to our estimates.” MSCI closed on Wednesday at 40.54.