UPDATE: Morgan Stanley Upgrades AbbVie to Overweight on Higher Humira, Pipeline Estimates

In a report published Monday, Morgan Stanley analyst David Risinger upgraded the rating on AbbVie

from Equal-Weight to Overweight, and raised the price target from $36.00 to $49.00. In the report, Risinger noted, “We see multiple call options in the underappreciated pipeline over the next 18-mon. 2015E EPS of $3.96 is 15% above cons. 3.8% div yield remains attractive vs. peers.Raised 2020E EPS by >50% from $2.96 to $4.61. Key drivers:1) Pipeline sales from $5.0B to $7.2B, 2) Humira 2020E sales from $8.6B to $9.8B due to smaller assumed hit from oral JAK and biosimilar competitors, 3) higher GM on Humira due to est. $1B reduction in royalties (via COGS) when patents expire in '17-‘18.” AbbVie closed on Friday at $42.39.