UPDATE: Morgan Stanley Downgrades Molycorp Citing Near-term Uncertainty, Removes PT

In a report published Tuesday, Morgan Stanley downgraded Molycorp Inc.

from Overweight to Equal-weight, and removed its price target on the stock. Morgan Stanley noted, "We are moving to Equal-weight on MCP following Friday's disclosure of a formal order of SEC investigation pertaining to, among other things, the accuracy of the company's public disclosures. While risk-reward in the shares remains attractive, our downgrade is driven by near-term uncertainty. We have no view on the eventual outcome of this investigation; it is possible that the worst case scenario is already priced in. But given the uncertainty surrounding this issue and the possibility that it will take some time to resolve, we are moving to Equal-weight and removing our price target. Our base case valuation goes to $12 from $18 previously on higher capex and discount rate." Molycorp closed at $7.17 on Monday.