UPDATE: Morgan Stanley Initiates Coverage on Hollysys Automation Technologies Ltd. with Overweight Rating, $25.80 PT on Positive Outlook

In a report published Wednesday, Morgan Stanley analyst Kevin Luo initiated coverage on Hollysys Automation Technologies Ltd. HOLI with an Overweight rating and $25.80 price target. In the report, Morgan Stanley noted, “We estimate a 26% earnings CAGR in F14-16 compared with 18% in F07-13. Our price target implies 14.5x F15 non-GAAP EPS, in-line with the peer group's historical average. Hollysys is one of the leading industry automation system makers in China. It mainly offers products in process control and factory automation in the industrial automation segment, and onboard and ground-based signaling systems for high-speed railways. We expect steady growth and market share gains in both segments for Hollysys.” Hollysys Automation Technologies Ltd. closed on Tuesday at $20.82.