UPDATE: Morgan Stanley Downgrades Tenaris to Equal-Weight on Weakening Fundamental

Morgan Stanley lowered its rating on Tenaris

from Overweight to Equal-weight and reduced its price target from $52 to $45. Morgan Stanley noted, "In our report last week, we highlighted issues with a furnace in Mexico likely to pressure earnings into year end. However, the latest OCTG market data suggest additional headwinds as actual US OCTG demand markedly has dipped below apparent demand (driven by distributor purchases), with inventories building from 4 to nearly 6 months worth of demand (typically 4 to 5 months is viewed as healthy). Furthermore, pricing pressure has reached premium grades of OCTG, following steadily decreasing prices for commoditized grades of welded and premium tubes. … We have lowered our volume expectations on lower US demand and growing inventories, and have reduced our pricing and margin assumptions accordingly." Tenaris closed at $38.04 on Friday.