Morgan Stanley ups Rolls-Royce to 'overweight'

Morgan Stanley upgraded shares of engine maker Rolls-Royce on Monday to ‘overweight’ from ‘equalweight’, saying it was "the clearest example of mispricing" in its coverage.

"Parsing the recent Civil Aerospace investor day suggests an earnings recovery is much closer than the market has priced in, while earnings and cash flow are directly geared to the next leg of a global aviation recovery," Morgan Stanley said.

The bank cuts its price target on the shares to 118p from 132p.