Morgan Stanley upgraded to Buy at HSBC on investment banking, wealth strength
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Contributor since / Followers
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2 days ago
Nikada
- HSBC upgraded Morgan Stanley (NYSE:MS) to Buy from Hold on the expectation that the stock’s underperformance vs. peer Goldman Sachs (GS) could be ending.
- A healthy market backdrop should benefit Morgan Stanley’s investment banking and wealth management franchises, boosting financial performance.
- Furthermore, “concerns about net interest income (“NII”) also seem overdone to us in light of healthy fee-based asset flows and accelerating management fee growth in Wealth Management,” HSBC analyst Saul Martinez wrote in a note to clients.
- Deposit cost pressures had hurt NII and net new client assets missed the company’s targets in three of the past four quarters. Fee-based asset flows, though, have been more resilient.
- In addition, a multiyear recovery in equity issuance and M&A should benefit Morgan Stanley (MS) “substantially.”
- HSBC’s Buy rating on the Wall Street bank contrasts with the SA Quant rating and the average Wall Street rating, both at Hold, and aligns with the average SA Analyst rating of Buy.
