UPDATE: Morgan Stanley Upgrades GenOn Energy to Equal-Weight on Valuation

Morgan Stanley raises its rating on GenOn Energy GEN from Underweight to Equal-weight and increases its price target from $1.20 to $1.40. Morgan Stanley comments, "GenOn has substantially underperformed its peers, with a 49% price drop YTD. While we remain cautious, we are upgrading to Equal-weight based on our sum-of-parts valuation. Equity benefit from further cost reductions is unusually high for GenOn, with ~80% upside from a 10% cost reduction." GEN closed at $1.33 on Friday.