Morgan Stanley upgraded Limited Brands (LTD

) to overweight from equal-weight, noting improvements in the company's business.

Analyst Michelle Clark noted operating performance at Express running significantly ahead of her expectations and continued momentum at Victoria's Secret. In addition, she believes there is a potential turnaround at Bath & Body Works beginning in the third quarter. She says these factors serve as catalysts to take the shares higher. She sees $1.71 fiscal year 2007 (ending Jan) EPS and $1.95 in fiscal year 2008. She has a new $33 stock price target.