UPDATE: Morgan Stanley Initiates Hubbell at Overweight on EPS Growth Outlook

Morgan Stanley initiated coverage on Hubbell HUBB with an Overweight rating and a $93 price target. Morgan Stanley commented, "YTD, HUBB has been a modest underperformer, gaining 18% vs. 19% for the sector. This lag has materialized since June, when the stock was trading at a 27% P/E premium – due to negative Non-Resi commentary and cooling off of consolidation expectations. We expect this to reverse in the near term as investors focus on 2013e EPS growth potential; we forecast 14% Y/Y growth, a top-tier performance, and $5.79 MSe sits 5% above consensus. In our view, upside to consensus is not far-fetched given that we are at the outset of a late-cycle recovery, and HUBB now has the greatest leverage (65% of sales) to late cycle verticals under coverage, via Non-Resi and Utility markets." Hubbell closed at $80.97 on Wednesday.