UPDATE: Morgan Stanley Raising Price Target On Baxter International

Morgan Stanley is out with a research report on Baxter International BAX and is raising its price target to $63, and it has an Overweight rating. In a note to clients, Morgan Stanley writes, "This was another strong quarter with improving margins and EPS growth increases visibility on upside to 2H11 and 2012 estimates. Baxter's guidance assumes a 400 bps deceleration in EPS growth to 6% in 2H11 from 10% in 1H11. However, our analysis of inorganic headwinds and tailwinds through 2011 suggests several margin drivers will improve through the year, implying this sequential deceleration may prove conservative. As investor focus turns to the 2012 outlook through the back half of 2011, consensus may develop a better appreciation of the growth implications of potential share gains and favorable mix in IVIG following the HyQ launch. This should reflect in the multiple. We expect EPS growth to accelerate from 7.5% in 2011 to 10.0% in 2012, though we see upside to our forecasts in both years." Shares of BAX gained $1.58 yesterday to close at $62.41, a gain of 2.6%.