Adtran (ADTN) shares rose Monday, after Morgan Stanley’s Scott Coleman upped his rating on the stock to Overweight from Equal Weight. He set a $31 price target on the networking equipment provider.

Coleman contends the Street consensus is underestimating the company’s traction in the broadband and optical networking segments, which he thinks can grow at better than 20% a year compounded through 2011, “and more than offset” a decline in Adran’s legacy business. “We expect shares to move higher as the [year-over-year] revenue growth re-accelerates after Q2 and drives operating margin expansion.” He also notes the company has $5 a share in net cash and a buyback plan that has already cut the share count by 17% over two years.

With the stock trading at 15x his 2009 estimate, Coleman thinks the stock looks attractive.

ADTN Monday closed up $1.39, or 5.9%, to $24.85.