UPDATE: Morgan Stanley Upgrades Gol Linhas Aereas Inteligentes SA (ADR) On Positive Outlook

In a report published Thursday, Morgan Stanley analyst Eduardo S. Couto upgraded the rating on

from Equal-Weight to Overweight, and raised the price target from $7.00 to $8.20. In the report, Morgan Stanley noted, “We expect strong 2H14e (8.0% EBIT margin) and 2015e (9.0% EBIT margin). With weak numbers since 2011, we now see GOL's EBIT margin back to a high-single-digit level of 9.0% next year on a combination of (1) capacity discipline with available seat kilometers (ASK) up only 1% y/y, (2) higher yield/load factor gains, and (3) stable costs without Brazilian real or fuel pressures. In our view, investors should buy GOL to benefit from margin expansion, positive FCF, and earnings in 2015e.” Gol Linhas Aereas Inteligentes SA (ADR) closed on Wednesday at $6.70.