11:20 AM EDT, 08/05/2024 (MT Newswires) -- MKS Instruments ( MKSI ) is poised to benefit from cyclical recoveries and growth in advanced packaging and electronics, Morgan Stanley said Monday in a report, initiating coverage of the stock at overweight.

"The stock has underperformed following the Atotech acquisition as a cyclical downturn has paused deleveraging, but an upturn should help the

company return to its prior playbook: 'Lever, Delever, Repeat'," the report said.

MKS Instruments ( MKSI ) historically has managed debt after acquisitions through rapid paydown during upcycles, the report said.

Significant exposure to NAND had resulted in underperformance as the semiconductor equipment and subcomponent cycle bottomed in Q3 2023, though the company will benefit from the projected growth of wafer fabrication equipment in 2025, the report said.

Morgan Stanley has a price target of $155 on MKS Instruments ( MKSI ).

Shares of the company rose 0.2% in recent trading Monday.

Price: 106.79, Change: +0.24, Percent Change: +0.22