AMFW.L Share News (AMFW)

(ShareCast News) - Morgan Stanley upgraded Amec Foster Wheeler to 'overweight' from 'equalweight' and bumped up the price target to 700p from 500p saying restructuring should outweigh disposals.The bank attributed the price target lift to increased confidence that the new CEO will drive a better earnings and returns outlook through restructuring than it previously expected."The new savings cost plan, likely to be announced at the strategy update on November 15, should offer more than enough scope to offset the loss of approximately £80m earnings before interest, tax and amortisation associated with £500m of asset disposals."The bank said it expects the new CEO to focus on monetising the significant cost savings potential it sees, in addition to the existing cost savings plan.MS forecasts £100m of further annualised savings starting from the first half of next year, with full impact in 2019."We expect the stock to re-rate as the cost savings story develops and the cycle continues to improve," it said.In terms of downside risks, MS said balance sheet concerns may return if the planned £500m of asset disposals does not go ahead.A further risk is that the cost savings potential is less than it assumes and the market begins to price this in.At 1026 BST, Amec shares were up 6.3% to 571p.