Morgan Stanley has started covering Ironwood Pharmaceuticals (NASDAQ:IRWD), and its first rating was an “overweight” with a price target of $19.
The primary drug being developed, which will determine much of its near term performance is linaclotide, which targets irritable bowel syndrome with constipation and chronic constipation.
Morgan analysts Sara Slifka and Steven Harr said they see a good chance of passing regulatory hurdles and being a clinical success. If the drug is released in a timely manner it could become the first to relieve pain in this particular health sector.
Morgan Stanley also announced it will resume coverage of Kraft Foods (NYSE:KFT), and their initial rating on that company was also “overweight,” including a price target of $32.
Covering Kraft for Morgan Stanley for now will be Vincent Andrews and Jaclyn Inglesby, who stated, “KFT has materially underperformed its packaged food peers since its final offer for Cadbury and now trades at the low end of the group. We believe KFT’s performance and valuation more than reflect the low ROIC on the Cadbury acquisition the integration risks ahead, and likely continued weak growth at heritage Kraft. At current levels, we see limited downside versus a greater likelihood of a 15% total return by year-end.”
Earnings projected for Kraft are $2.11 a share in 2010 and $2.35 a share in 2011.
In other coverage, Morgan said they’re upgrading fourth-quarter estimates for Research in Motion (NASDAQ:RIMM), with guidance now on the upper end, and increasing the price target from $90 to $95.
Earnings a share for Research in Motion stands at $4.42 for 2010 and $5.28 for 2011.
