(Sharecast News) - Morgan Stanley has upped its target price for Inmarsat and, while the recent rally in the shares makes the valuation "not particularly appealing", there are variables in the pipeline that could make the shares look cheap. The satellite operator, whose shares have rallied from lows of around 350p in April to almost 540p on Tuesday's close, above the 532p level at which US rival Echostar declared an interest in a takeover."This has brought the company more time and has shifted focus away from the lack of meaningful cash generation until 2021e and our estimate that net debt to EBITDA will peak at 3.5x in 2019," Morgan Stanley said, seeing a "very gradual" improvement in the core maritime, government and aviation businesses meanwhile.Morgan Stanley kept its 'equal-weight' rating but raised its share price target raised to 560p on the back of management's guidance for lower capex expectations from 2021, updated GBP-USD assumptions of $1.30 from $1.35 as the company benefits from sterling weakness.Analysts see the shares supported by the 532p Echostar price, which Inmarsat said 'very significantly undervalues' the company.While the price target for the core satellite business is 560p, Morgan Stanley noted that it has previous ascribed a valuation for the Ligado contract worth a further 200p, "but the visibility on value realisation here is uncertain" and dependent on a ruling from the US Federal Communications Commission."Furthermore, our bull case includes a further 250p of value creation from successfully executing on inflight connectivity, which is Inmarsat's new growth project."