Morgan Stanley Upgrade Powers Mylan Stock Rebound

MYL is trading back above its year-to-date breakeven level

Mylan NV (NASDAQ:MYL) is up 1.3% to trade at $27.75, after Morgan Stanley upgraded the EpiPen maker to "overweight" from "equal weight," while trimming its price target to $35 from $39. The brokerage firm said the stock is trading nearly "historical valuation lows," and is running at a discount to its sector peers.

This follows last week's 12.2% drop, which was Mylan stock's worst week since August 2017. A fourth-quarter earnings miss prompted a flurry of bear notes, and MYL slipped to a six-year low of $26 on Feb. 27. Today's upside takes the shares back above their year-to-date breakeven point, though the 10-day moving average is perched overhead.

Morgan Stanley's upgrade today is indicative of the general analyst sentiment. At last night's close, nine of the 15 brokerages covering MYL rated it a "buy" or better, with zero "sells" on the books. What's more, the security's consensus 12-month price target of $36.79 is a 34% premium to last night's close at $27.39.

In the wake of Mylan's earnings report last week, short-term volatility expectations have imploded on the stock. At last check, the equity's Schaeffer's Volatility Index (SVI) of 31% ranks in the 15th annual percentile.