UPDATE 1-RESEARCH ALERT-UBS raises Innophos to buy

(Recasts; adds details, share movement)

Oct 24 (Reuters) - UBS upgraded Innophos Holdings Inc (IPHS.O) to "buy" from "neutral", saying the specialty chemical maker was benefitting from favourable raw-material contracts and significant pricing gains.

Shares of the company were up 9 percent at $22.39 in morning trade on the New York Stock Exchange.

The brokerage said the company's earnings should be independent of the broader demand slowdown.

"We estimate that these elevated earnings are likely to last through 2009 and beyond, as raw material costs have already begun to fall and pricing gains are likely to be retained, analyst Chris Shaw wrote in a note to clients.

"There are no credit issues that we can foresee and the company will have nearly zero net debt by next year," the analyst wrote.

The brokerage has a price target of $40 on the stock. (Reporting by Antonita Madonna Devotta in Bangalore; Editing by Amitha Rajan)