UPDATE: Morgan Stanley Reiterates Equal-Weight Rating, Raises PT on PHH Corporation on Multiple Positive Factors

In a report published Thursday, Morgan Stanley analyst Cheryl M. Pate reiterated an Equal-Weight rating on PHH Corporation (NYSE: PHH), and raised the price target from $23.00 to $27.00.In the report, Morgan Stanley noted, “Management is executing on its mortgage milestones, improving servicing profitability and exploring strategic options to enhance shareholder value. During the quarter, PHH resolved its repurchase backlog with the GSEs, is executing on alternative MSR funding strategies and is in the process of renegotiating / amending its private label securities (PLS) contracts. Going forward, PHH is taking decisive action to re‐engineer the mortgage business for the more challenging market conditions expected in the production business in 2014. Key focuses include: another planned expense reduction initiative aimed at removing another $110M in expenses relative to 2Q13 annualized run rate (on top of the $60M achieved), evaluation of new products, channels and inorganic growth opportunities in the production business, developing a separate MSR secured funding structure and continuing to amend PLS contracts (22% through).”PHH Corporation closed on Wednesday at $25.80.