MiniMed (MMED) offers a differentiated diabetes platform with improving growth and margin expansion, supported by US underpenetration and operating leverage, Morgan Stanley said in a Tuesday research report.

The company's comprehensive offerings for diabetes management creates a "walled garden" ecosystem of recurring revenue streams, analysts wrote, adding that they expect MiniMed Go to generate to nearly $400 million in annual revenue by fiscal 2030.

Mix shift to the pharmacy is a long-term tailwind without posing much risk to near-term numbers, given that US insulin pump sales account for less than 10% of company revenue at present, according to the note.

The MiniMed Go Smart multiple daily injections are an underappreciated aspect of the story, with considerable upside potential even at low penetration levels and with price compression baked in, according to Morgan Stanley.

The brokerage said it initiated coverage of the stock with a price target of $19 per share.

Price: 15.21, Change: +0.86, Percent Change: +5.96