Shares of Mylan NV (MYL - Get Report) surged on Tuesday, March 6, after Morgan Stanley & Co. LLC upgraded its rating on the stock and said the drugmaker is "well positioned" to gain share in the U.S. generics market.

The stock jumped 5% to $43.66 in morning trading. Shares are up 3% year-to-date but down 1% over the last 12 months.

Morgan Stanley analyst David Risinger hiked his rating on Mylan to overweight from equal-weight and increased his price target from $39 to $50, citing greater confidence in the company's growth prospects.

"Beyond its strong pipeline of new products, Mylan has opportunities to gain share relative to generic competitors which are facing challenges," Risinger said in the note.

Risinger pointed out that Teva Pharmaceutical Industries Ltd. (TEVA - Get Report) , the top player in the generics market, is restructuring, having announced in December its plan to cut 14,000 jobs globally, or more than a quarter of its staff, over the next two years.

Meanwhile, the U.S. generic pill business of Novartis AG (NVS - Get Report) unit Sandoz, which is the No. 3 player, was reported by Reuters last month to be readying a sale process, while "No. 8 player Apotex has faced leadership challenges," Risinger said.

The analyst also thinks investor enthusiasm for Mylan's pipeline of biosimilars, or copies of existing drugs, will grow over time. In December, the FDA greenlighted Ogivri, the first of Mylan's 18 biosimilar candidates. Ogivri is a biosimilar of Roche Group (RHHBY) unit Genentech's Herceptin, which is used to treat breast cancer and metastatic stomach cancer. Mylan developed Ogivri with Biocon Ltd.

Risinger said Mylan and Biocon's biosimilar of Amgen Inc.'s (AMGN - Get Report) white blood cell boosting drug Neulasta could clinch regulatory approval this year.

"We view Mylan as the best positioned US generics company to capitalize on biosimilars via its industry-leading partnerships with Biocon and Momenta," he said.

Mylan is also working with Revance Therapeutics Inc. (RVNC - Get Report) on a biosimilar of Allergan plc's (AGN - Get Report) Botox. Mylan and Revance announced their collaboration on Feb. 28.

Also on Feb. 28, Mylan, whose principal executive offices are in Hertfordshire, England and global headquarters are in Canonsburg, Pa., reported fourth-quarter adjusted diluted earnings per share of $1.43, representing a 9% decline from the year-ago period. Revenue dipped 1% to $3.24 billion.

Analysts had forecast, on average, non-GAAP EPS of $1.41 on revenue of $3.29 billion, according to FactSet Research Systems.

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