BUZZ-Pearson: tops Stoxx as Morgan Stanley calls it too cheap

** Education co Pearson (Xetra: 858266 - news) up 5.6 pct, biggest one-day rise since Feb and top of Stoxx 600 as well as FTSE 100

** Morgan Stanley (Xetra: 885836 - news) says that down 25% from its highs and with a c10% 2018 FCF yield versus a PE of 10x the market is expecting another profits warning

** "We don't think Pearson will warn, meaning the shares could recover sharply on the Q3 results," MS says

** Co set to report results later in October (announces date nearer the time)

** Exane BNP Paribas, only late Sept, downgraded Pearson (Amsterdam: PR8.AS - news) ('neutral'), saying risk of further setback at Q3 results increased as US higher ed courseware market weaker than expected

(RM (LSE: RM.L - news) :rahul.b.thomsonreuters.com@reuters.net)