UPDATE: Morgan Stanley Reiterates On Spansion Following Fujitsu Acquisition

In a report published Friday, Morgan Stanley analyst Craig Hettenbach reiterated an Overweight rating on

, and raised the price target from $20.00 to $24.00. In the report, Morgan Stanley noted, “Spansion's acquisition of Fujitsu's MCU and analog business is transformative, leading to six-fold increase in TAM to $30bn and higher corporate average margins. We are very positive on the risk/reward of the deal, with downside protected by: no absorption of fixed assets, closing post a major restructuring, and low price (0.25X P/S). We see incremental value of Fujitsu's business at ~$9. We expect upside form here to be driven by GM expansion, growth in MCU / Analog and further IP monetization.” Spansion closed on Thursday at $21.48.