© Reuters. Societe Generale downgrades Morgan Stanley (MS) on account of rising deposit prices
Societe Generale (OTC:) downgraded shares of Morgan Stanley (MS) to Maintain from Purchase, decreasing the value goal on the inventory to $80 from $95 per share in a be aware Tuesday.
Analysts stated they’re decreasing the ranking for the financial institution on account of rising deposit prices.
“We have viewed MS as a quality growth stock for some time, increasingly geared towards wealth and asset management via strong organic growth and astute strategic (albeit expensive) acquisitions,” the analysts famous.
Nonetheless, they famous that the expansion trajectory is coming beneath strain from rising deposit prices.
“MS suffered a notable 9% sequential decline in WM NII in 3Q23, reflecting a continued shift in deposits from cheap sweep deposits to more expensive time deposits,” they added. “Management guided that it expected NII to trend lower going forward, but did not provide visibility on the magnitude of the decline or timing for any trough, merely that it would depend on deposit mix and the trajectory of rates.”
The agency additionally fears that MS’s extra capital may flip right into a deficit beneath Basel 4 rules, “constraining its ability to grow.”
