Morgan Stanley cut at JPMorgan as stock offers limited upside

JPMorgan analysts downgraded shares of Morgan Stanley (MS) to Neutral from Overweight, lowering their price target for the stock to $87 from $94 per share in a note Wednesday.

The firm made the call following Morgan Stanley’s latest earnings release. JPMorgan believes Morgan Stanley offers limited upside based on its current valuation.

“We see MS’ excellent acquisitions benefits largely discounted, Equity S&T market share plateauing and see limited stock specific catalysts in the near-term which have been a source of outperformance for the stock in the past,” wrote analysts at JPMorgan.

“While MS offers significant gearing to improvement in capital markets activity, we reflect this in our estimates with IBD revenues +47% YoY in our 2024E forecasts and we would seek any further upside to this exposure through GS (OW), which is our preferred name in US IBs while we prefer UBS (OW) global exposure for WM gearing,” they added.

JPMorgan also cut its 2024/25/26E adjusted EPS forecasts for MS by 4%/3%/2% based on lower revenues and higher costs. They expect consensus expectations to move lower following the results adjustments.