UPDATE: Morgan Stanley Upgrades Forest Laboratories Ahead of Further Financial Upside

In a report published Tuesday, Morgan Stanley analyst David Risinger upgraded the rating on Forest Laboratories FRX from Equal-Weight to Overweight, and named an $86.00 price target. In the report, Morgan Stanley noted, “Our Base Case is an earnings and multiple call: cons under-estimates durability of growth. We raised F15E (Mar) EPS 25% from $3.13 to $3.90 (5% above cons) and F16E EPS 23% from $3.86 to $4.73 (9% above cons). Cons is not fully updated for the Aptalis close Feb 3rd, but we believe investors under-appreciate Namenda earnings durability in the wake of the hard conversion to longer patent life XR announced late-Friday Feb 14th. We est. Forest F16-F21 5-yr EPS CAGR of 8%, and we believe cons under-estimates durability of growth and P/E will rise.” Forest Laboratories closed on Friday at $71.39.