UPDATE 1-RESEARCH ALERT-Morgan Stanley ups Ternium to overweight
Oct 30 (Reuters) - Morgan Stanley upgraded Latin American steelmaker Ternium (TX.N) to "overweight" from "equal weight," citing improvement in steel markets and expected increase in cash collection from the sale of its Sidor unit.
Argentina-based Ternium sold its stake in steelmaker Sidor to Venezuela for $1.97 billion in May 2009 amid labor problems [ID: nN07376917].
"Sidor sale will increase Ternium's cash balance to $2.8 billion by the end of 2010," analyst Carlos De Alba wrote in a note to clients.
"Therefore, we expect Ternium to have the strongest balance sheet in our steel coverage universe," Alba added. Alba, who raised the price target for Ternium stock to $33 from $22, also wrote that expected debt reductions should further increase the company's market cap.
For 2009, the brokerage raised its EBITDA estimates for the company by 1 percent, while 2010 forecast was raised by 2 percent.
Shares of Ternium rose more than a percent to $25.60 in early morning trade on the New York Stock Exchange on Friday. (Reporting by Krishna N. Das in Bangalore; Editing by Anil D'Silva)
