UPDATE: Morgan Stanley Reiterates Equal-Weight Rating, Lowers PT on Dead Foods Co. as Initial Guidance is Below Expectations

In a report published Wednesday, Morgan Stanley analyst Matthew Grainger reiterated an Equal-Weight rating on

, but lowered the price target from $19.00 to $15.00. In the report, Morgan Stanley noted, “While we had recently grown more cautious on the 2014 outlook, DF provided initial guidance far below our expectations, calling for EPS of $0.73-0.86 (vs. consensus $1.13) and EBITDA of $335-355 MM (down ~10-15%). Key headwinds facing the company during the coming year include Class I milk prices at all-time highs, continued volume declines in 1H, a weak US consumer (SNAP cuts), and a $30 MM step up in incentive compensation.” Dead Foods Co. closed on Tuesday at $14.08.