Morgan Stanley downgrades Indofood Agri Resources (5JS.SG) to Equalweight from Overweight, cuts target price to $2.30 from $2.60, says Dow Jones.

Morgan Stanley says changes reflect reduction in FY10-FY12 earnings estimates by average 16% to reflect weaker-than-expected production outlook this year, higher costs, lower profits from branded cooking oil business.

Research house adds, valuations look full. Tips rebound in CPO price and production volumes, plus sustained decline in cost of capital as catalysts for stock.

Shares +0.4% at $2.34.