Morgan Stanley upgraded Unity Software to Overweight from Equal Weight with an unchanged price target of $22. Over the past 12 months, the shares have underperformed the S&P 500 Index by 80% as execution headwinds, management turnover, and a major restructuring led to a significant expectations reset, the analyst tells investors in a research note. However, following the cut to 2024 guidance at the Q2 results, the firm now views forward estimates for Unity as “derisked.” Morgan Stanley says that despite its customer relations challenges, the company’s game engine has maintained its 70% market share in mobile and “proven how deep its moats truly are,” as competitors have been unable to gain share at Unity’s expense. The firm is “more confident than ever” in the company’s strategic and competitive position.