J.P. Morgan Upgrades MSW To Neutral, Raises PT To $7

J.P. Morgan has upgraded Mission West Properties MSW from Underweight to Neutral and has raised the price target from $6 to $7, based upon expected improvement going forward. In the report, J.P. Morgan writes, “We are upgrading MSW to Neutral from Underweight. We believe MSW's earnings should trough this year and start to benefit from a broader improvement in Northern California commercial real estate fundamentals. We are raising our 2011 FFO/share $0.08 from $0.45 to $0.53/share, ahead of company guidance of $0.50 to $0.51/share. The majority of this increase comes from MSW renewing more leases in 2011 than it initially thought it would; however, we note about $0.02 to $0.03 of the raise in our estimate is due to one-time items in 1Q. We are maintaining our 2012 estimate of $0.54.” MSW closed at $6.99 yesterday.