Morgan Stanley sees Barclays and HSBC as set forencouraging results from the third quarter, rating both "overweight", while itgives Lloyds an "underweight" rating based on a more cautious outlook.
Barclays has an attractive valuation and high expected international bankingrevenues, with lower impairments off the back of their Africa and wholesaleoperations, note analysts at Morgan Stanley Research Europe.
However, Morgan Stanley is more cautious heading into Lloyds' results.
"We expect lower net interest income as loan balances shrink, with marginsstable, costs to remain flat and impairments to moderate as expected, we expectnegative EPS revision after the results," the Morgan Stanley analysts say in thenote.
"We are "underweight" as we see consensus as too optimistic on revenueoutlook and potential for capital return."
On Standard Chartered and RBS , Morgan Stanley is "equalweight", with a neutral outlook heading into results season.
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Keywords: MARKETS EUROPE STOCKSNEWS