Morgan Stanley Equal Weight On Sara Lee Corp. (SLE)

Morgan Stanley has an Equal Weight rating and a $14.50 price target on shares of Sara Lee Corp.

. In a note to investors, Morgan Stanley writes, "We are retaining our EW rating, lowering our F11 and F12 EPS estimates, but maintaining our $14.50 fundamentally driven sum of the parts PT. Nonetheless, we recognize that the market could both continue to look through EPS risk and continue to assign a takeover premium to Sara Lee, particularly following further strategic announcements today (see our $23 Bull Case on page 2). While pricing did sufficiently cover inflation in North America in F3Q11, inflation has intensified by ~$100 million and will require incremental pricing that will likely result in volume elasticity, in both our and management's view. The reality, however, is that the pricing battle will likely be fought through F2012 as SLE has only faced 6% of the 30% cash inflation that will hit the P&L." Shares of SLE gained 14 cents yesterday to close at $19.28, a gain of 0.73%.