UPDATE: Morgan Stanley Upgrades Halcon Resources as Thesis Has Played Out

In a report published Thursday, Morgan Stanley analyst Drew Venker upgraded the rating on Halcon Resources (NYSE: HK) from Underweight to Equal-Weight, but lowered the price target from $5.00 to $4.00.

In the report, Morgan Stanley noted, “Upgrading Halcon to EW and lowering our PT to $4. HK no longer reflects overly optimistic growth and NAV assumptions and discounts minimal probability of an acquisition of the company. Bearish catalysts [have] played out: 1) HK raised capex guidance and lowered production expectations for 2013 and 2014; 2) exploration disappointed the market's high hopes, particularly in the Utica, but also the Woodbine; 3) HK raised capital to maintain liquidity.”

Halcon Resources closed on Wednesday at $3.82.