UPDATE: Morgan Stanley Upgrades Compania de Minas Buenaventura

In a report published Wednesday, Morgan Stanley analyst Carlos De Alba upgraded Compania de Minas Buenaventura SAA (NYSE: BVN) to Overweight, changing its price target to $15.80.

According to the report, BVN's current valuation both discounts a gold price of $1,000.00/oz, or 19 percent below spot and does not reflect the company's ongoing operational turnaround leading to the recent upgrade.

“BVN is down 65% LTM, underperforming gold by 39 pct. pts. and its NA peers by 12 pct. pts,” the report noted. “The stock trades 39% below the average of its NA peers' 2014 P/E. Using market values for Cerro Verde and El Brocal and BVN's stake in each, we derive an implied market value for BVN's precious metals operations. We calculate that the valuation of those operations is down by 47% since 2007. Further, BVN's valuation discounts gold at ~$1,000/oz in perpetuity, 19% below spot of $1,240 and 14% below our commodities team's new 2014 forecast of $1,160.”

BVN closed Tuesday at $12.69 with shares trading up 3.34 percent.