UPDATE: Morgan Stanley Initiates Coverage on Eaton Corporation PLC with Equal-Weight Rating, $70 PT on Strong Recent Performance, Bullish Consensus

In a report published Wednesday, Morgan Stanley analyst Nigel Coe initiated coverage on Eaton Corporation PLC

with an Equal-Weight rating and $70.00 price target. In the report, Coe noted, “Given strong recent performance and bullish consensus, we launch with an EW rating and $70 target. However, above-average EPS growth outlook through 2015 and potential for relative P/E multiple expansion argue for buying on major dips...ETN has been a rock star performer, rallying 65% from its 2012 lows. The stock now trades at 14.1x NTM consensus – an 8% discount to peers which is consistent with where the ETN/CBE hybrid would have historically traded. While we see scope for this discount to narrow longer term, given outlook for 14% EPS CAGR though 2015, we do see some 2013e risk vs. bullish Street expectations. Therefore, a small discount remains warranted, in our view.” Eaton Corporation PLC closed on Tuesday at $60.93.