The research arm of the financial giant rates the stock "overweight" and targets a price of 705 pence (current price 472 pence).
The mining company has four producing mines - all in northwest Tanzania. Over ten years, the firm has become the largest gold producer in the African country and had around 701,000 attributable ounces last year.
Morgan Stanley calculated that every 10 percent change in the gold price increases the firm's full year earnings (EBITDA) by around 18 percent.
Analyst Alain Gabriel added that Morgan Stanley believes the firm's shares reflected the market’s pessimism about the operating challenges at Buzwagi in addition to the concerns over taxation changes in Tanzania.
Last month, the firm tried to allay fears of reported changes to the tax regime for mining companies in Tanzania, after the minister for finance presented the 2011/12 Budget to the Dodoma Parliament, and said the Tanzanian government had shown its ongoing commitment to the industry.
In May 2011, African Barrick said, following a power outage and attempted plant restart at the Buzwagi mine, there was a malfunction in a mill motor, which would take up two weeks to resolve - causing the plant to run at reduced capacity.
The firm estimates that the production impact in the current quarter would be around 10,000 ounces of gold, but it expects to recover most of this over the second half of the year, and the full production expectations for Buzwagi remain unchanged.
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Morgan Stanley predicted
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