Morgan Stanley took aim at Target (TGT) - Get Report Monday and upgraded its rating on the retailer to equal-weight from underweight.

Shares were up nearly 1% to $71.49.

Analyst Simeon Gutman also reiterated his $67 price target for the Minneapolis-based company. Gutman wrote in a note to investors that he believes Target's margin erosion will likely "moderate in the near-term." In addition, he said that he believes "the risk that TGT misses its margin guide is appropriately reflected in the stock's relatively inexpensive valuation."

Target is scheduled to report earnings on Wednesday. Shares of Target were up slightly to $71.29 in premarket trading.

Last month, analysts at Barclays upgraded Target to overweight from equal-weight. The firm also raised the company's price target to $115 per share from $85.

In March, Target reported stronger-than-expected fourth-quarter earnings after a solid holiday shopping season that saw increased foot traffic and same-stores sales. The company said earnings came in at $1.53 a share, up 11.7% from the same period last year and 1 cent ahead of Wall Street's consensus forecast.

Sales were essentially flat compared with last year at $22.98 billion and modestly ahead of analysts' estimates of $22.91 billion. Same-store sales growth was 5.3%, firmly ahead of market expectations of 5.%. Target had said that its holiday activity was the strongest since 2005.

As of Feb. 2, the company operated 1,844 stores.

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