UPDATE: Morgan Stanley Initiates PBF Energy at Overweight on Risk/Reward

Morgan Stanley initiated coverage on PBF Energy

with an Overweight rating and a $40.00 price target. Morgan Stanley noted, "PBF is the 5th largest US independent refiner. We see attractive risk/reward and a $40 target driven by relative and absolute re-rating (cheaper than peers on ‘14 EV/EBITDA), formation of a midstream MLP (+$7/sh) and earnings upside (+10% higher). We expect rail will resurrect East Coast refining. … We see potential for improved capture rates in North East as system runs in new configuration (EPS upside), potential for MLP formation in ‘13-14 ($7/sh uplift) and increased disclosure to help the Street to recognize PBF's true earning's power." PBF Energy closed at $28.50 on Friday.