UPDATE: Morgan Stanley Reiterates on Thermo Fisher Scientific

In a report published Monday, Morgan Stanley analyst Daniel Brennan reiterated Overweight on Thermo Fisher Scientific (NYSE: TMO), raising its price target from $119.00 to $128.00. According to the report, it is expected that 2014 will be another strong year, driven by improving demand. LIFE benefits and strong execution. The analysts are lowering their 2014/2015 pro-forma EPS forecasts as management is expected to take a conservative approach when setting pro-forma guidance. “We're now including an estimate of potential LIFE transaction dis-synergies in 2014 and 2015, which lowers our 2014 EPS from $7.14 to $7.00 and 2015 EPS from $8.22 to $8.14,” the report said. “Our forecasts have an upward bias given the benefits of improving demand in 2014 (US Academic and industrial) plus conservative LIFE synergy targets. A potential drag to our 2014 forecast is the timing of closing the LIFE transaction, given our forecasts assume a January 1st 2014 closing (whereas closing is still pending additional regulatory clearance, most notably in the US and China).”Key value drivers from the report included: -Visibility towards LIFE closing & pro forma EPS outlook -Cont'd focus on productivity and additional cost cutting to drive significant bottom line leverage. -2014 base business improvement: given improving Industrial & US academic end markets -Cont'd build out of emerging markets business, where the company is undersized vs. peers. Some risks to TMO included worse than expected contraction in US/EU academic and government spending and pharma spending slowdown. TMO closed Friday at $110.55.