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- RBC Capital Markets analyst Gerard Cassidy downgrades Morgan Stanley (MS +1.2%) to Sector Perform as traditional commercial banks are likely to outperform investment banks like Morgan Stanley due to expected rising interest rates.
- The bank's stock has performed strongly over the past 18 months on better-than-expected core earnings and the acquisitions of E*Trade and Eaton Vance, he adds.
- Still, he believes Morgan Stanley's (NYSE:MS) outlook is healthy.
- Cassidy's Sector Perform rating agrees with the Neutral Quant rating and breaks from the average Wall Street analyst rating of Bullish (10 Very Bullish, 9 Bullish, 8 Neutral, 1 Bearish).
- In the past year, Morgan Stanley's (MS) total return of 104% exceeds those of Goldman Sachs (NYSE:GS), JPMorgan (NYSE:JPM), and Bank of America (NYSE:BAC) as seen in the chart below.
- In August, SA contributor Khaveen Investments already considered MS's stock price was near target
