UPDATE: Morgan Stanley Downgrades Skullcandy to Equal-weight

Morgan Stanley has published a research report on Skullcandy SKUL and has downgraded the company from Overweight to Equal-weight after performing channel checks. In the report, Morgan Stanley wrote, "We now expect competition to have a greater impact and see more risk. Four field observations drive our thesis change: 1) Our latest Target store visit revealed SKUL's high volume “Ink'd” product now selling for $16.99, down from $19.99 and 2) Monster is taking further peg share; 3) We have also seen Radio Shack 30% off SKUL discounts; and 4) Staples is replacing SKUL's high-price Aviator product with Soul's offering. Improved Apple earbuds are another negative." Morgan Stanley also lowered the price target from $21 to $15 on Skullcandy, which is currently trading down 7.79 percent from its $14.25 closing price Wednesday.