Morgan Stanley upgrades YPF stock due to macro stability By Investing.com

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On Thursday, Morgan Stanley upgraded its rating on shares of YPF SA (NYSE: YPF) from Underweight to Equalweight. With this upgrade, the price target has increased significantly, moving from $10.50 previously to $22.00.

Morgan Stanley’s adjustment reflects a change in its positive view of Argentina’s economic situation. The company cited progress in macroeconomic stability and the economic team’s positive outlook as the main reasons for the revision.

As a result, discount rate assumptions for Argentina have been lowered, reducing the risk premium associated with Argentine assets compared to other Latin American markets.

Despite the upgrade, Morgan Stanley maintained a cautious stance, noting that Argentina’s risk premium is about 250 basis points higher than other Latin American countries. This indicates that although the outlook has improved, there are still inherent risks compared to regional peers.

The revised discount rate had a significant impact on Morgan Stanley’s price target for Argentine assets, with YPF SA experiencing a notable upward revision. The new price target of $22.00 per ADR is more than double the previous target of $10.50 and signals increased confidence in the company’s valuation.

Morgan Stanley’s upgrade of YPF SA comes amid a broader reassessment of Argentine assets as economic indicators suggest a more stable investment environment. The firm’s analysis provides a more balanced view of YPF stock and aligns it with the average ratings of other companies in the region.

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