MS keeps upbeat view on Europe's metals and mining
** "Upside potential persists," Morgan Stanley says on Europe's metals and mining sector, sticking to its "attractive" view despite the pull-back in commodity prices and mining equities
** "Notwithstanding summer seasonality, equities offer a wide-enough valuation buffer, mark-to-market upgrades, and leverage to commodity price upside" - MS
** Supply challenges have sparked a return of M&A action, which is supportive for equity re-rating, it says
** It keeps its preference for mining over steel, and sees the most compelling investment case in Rio Tinto RIO.L
** MS is selective on copper equities amid stretched valuations, preferring Lundin Mining LUN.TO, First Quantum FM.TO and KGHM KGH.WA, while Boliden BOL.ST is its key "underweight"
** Endeavour Mining EDV.L is at a FCF inflection as it ramps-up its Sabodala-Massawa expansion and Lafigue project, it adds
Reporting by Anna Pruchnicka
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