August 17, 2016 / 10:52 AM / 2 years ago

BUZZ-Valeant Pharmaceuticals: Morgan Stanley lifts to top rating

** Canadian drugmaker’s U.S-listed shares up 9 pct at $29.10 premarket after Morgan Stanley upgrades to “overweight” from “equal weight” - first upgrade to a “buy” or equivalent rating in the past year

** Morgan Stanley says it is more constructive on the stock after company’s positive announcements, including reiteration of 2016 outlook and plans to sell assets to pay down debt

** Valeant is offering to pay lenders higher interest rates in order to obtain an amendment to its debt agreement that would loosen one of its covenants, Reuters reported on Tuesday

** Morgan Stanley expects co to successfully renegotiate debt covenants on modest terms, pay down $5 bln in debt over the next year and succeed in “billion of dollars” worth of asset divestitures

** “Our investment thesis is primarily a multiple call - that as new management transforms Valeant and reduces debt, VRX’s stock multiple can expand,” MS analysts wrote in a note

** MS lifts PT on U.S. stock to $42 from $33; median PT is $35

** Of 20 analysts covering the stock, 5 have a “buy” or higher rating, 11 have a “hold” and 4 a “sell” or equivalent rating

** Up to Tuesday’s close, U.S. stock has fallen about 74 pct YTD; Toronto-traded stock have fallen 76 pct YTD (Reuters Messaging:

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