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Top bank analyst: This stock to double

Morgan Stanley stock appears on track to double, top-rated bank analyst Mike Mayo of CLSA said Tuesday.

"My three top picks, as you've heard before on this show, are Morgan Stanley, Morgan Stanley, Morgan Stanley," he said on CNBC's "Fast Money."

"It's done great," he added. "It's been a double since July of last year, and we think it's on the way to doubling again over the next three years."

(Read more: Momentum stocks most vulnerable: Joe Terranova)

Mayo acknowledged that the financial sector was under pressure.

"Revenues stink in the banking industry. We still think that this decade will be the worst decade for bank revenue growth since the decade of the Great Depression," he said. "Loans have hardly grown this year in aggregate. Mortgage revenues are going down, and trading are taking a little his this quarter."

But he also added that he was positive on Morgan Stanley and Citigroup, "both which are at multiyear turning points, and where the restructuring story can cut through the revenue weakness."

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(Read more: 'Uptrend is intact' for S&P 500: Louise Yamada)

Morgan Stanley and Citigroup were both a "buy," according to Mayo, with price targets of $36 and $66 per share, respectively.

Mayo also had an "outperform" rating on Wells Fargo, with a price target of $46 per share.

Bank of America, however, was one stock to avoid due to its legal tail risk being the largest among the big banks.

Downward revisions in fixed-income units were not a concern for Mayo.

(Watch video: Mike Mayo's $100 trillion opportunity)

"It's not new news in the past two weeks now," he said. "we have fixed-income trading data out of Morgan Stanley and at Citi, done one-fifth, one-fourth this year. The next two years after this, we have it down 10 percent each year. By the way, it's down over the last three years.

"Fixed-income trading revenues – it's not what's driven the bank earnings. And I consider these trading revisions noise. You look back six, 12, 18 months from now, it'll be a blip on the screen."

By CNBC's Bruno J. Navarro. Follow him on Twitter @Bruno_J_Navarro.

Trader disclosure: On Sept. 24, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Stephen Weiss is long C; Stephen Weiss is long BAC; Stephen Weiss is long FB; Stephen Weiss is short JCP; Jon Najarian is long AAPL; Jon Najarian is long FB; Jon Najarian is long MSFT; Jon Najarian is long LULU; Jon Najarian is long GRPN; Jon Najarian is long P; Jon Najarian is long ORLY; Jon Najarian is long SYK; Jon Najarian is long MGM; Jon Najarian is long WYNN; Jon Najarian is long MAR; Jon Najarian is long CERN; Jon Najarian is long COP; Jon Najarian is long FIO; Jon Najarian is long GPS; Joe Terranova is long OXY; Joe Terranova is long MS; Joe Terranova is long LTD; Joe Terranova is long SBUX; Joe Terranova is long VLO; Joe Terranova is long APC; Joe Terranova is short XBI; Joe Terranova is short NFLX; Joe Terranova is short PCLN; Michael Murphy is long BAC; Michael Murphy is long C.

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MS
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C
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BAC
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