UPDATE: Morgan Stanley Reiterates On Medtronic, Inc. On Proposed Treasury Rules

In a report published Tuesday, Morgan Stanley analyst David R. Lewis reiterated an Overweight rating on

, but removed the $73.00 price target. In the report, Morgan Stanley noted, “Proposed Treasury rules on inversion could impose additional financing costs on Medtronic but do not appear to derail the transaction entirely. Should Treasury block hopscotch loans as proposed, Medtronic may not be able to use its ~$15 billion in OUS cash to finance the deal. If Medtronic were to raise debt instead, we estimate EPS accretion would decline by about $0.14-0.18 (3-4%) and pro forma total debt / EBITDA would rise to about 3.5x (from 2.0x in our base case). This structure still accesses future cash, is neutral to ROIC and remains value-creating for shareholders.” Medtronic, Inc. closed on Monday at $65.98.