Advanced Drainage downgraded to Equal Weight from Overweight at Morgan Stanley

Morgan Stanley analyst Joshua Pokrzywinski downgraded Advanced Drainage Systems to Equal Weight from Overweight with a price target of $114, up from $107. The company’s material substitution model benefits most from inflation and non-residential strength, both of which are moderating, the analyst tells investors in a research note. The firm says Advanced Drainage’s key verticals are slowing disproportionately while “megaprojects are less of a tailwind.” It adds that a “lull in incremental price” limits the company’s margin catalysts. As such, it downgraded the stock following the recent rally.