UPDATE: Morgan Stanley Downgrades WebMD to Underweight, Sets $20 Target

Morgan Stanley downgrades WebMD

to Underweight on another disappointing guide, and establishes a $20 price target. Morgan Stanley says, "Key concerns leading to our Underweight rating include: (1) Repeated guidance reductions, including a sharp deterioration in management's outlook between early November and early January. (2) Fear that WBMD may be losing share to more aggressive competitors. (3) Our forecasts imply a 7% Y/Y revenue decline and 25% Y/Y EBITDA decline in 2012, and just single-digit revenue growth beyond 2012, well below WBMD's prior trend growth. (4) Still-elevated multiples: at $26, WBMD trades at 9X/8X our 2012E/2013E EBITDA, a premium to businesses that are growing in 2012 (DMD, EXPE, DRIV at around 5X EBITDA), and faster-growing businesses such as GOOG (9X/7X)." WBMD closed at $26.25 per share on Tuesday.