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Pro Analysis

Buy Morgan Stanley on the dip due to its improving trading business, Deutsche Bank says

Pigeons sit on a traffic light in front of the Morgan Stanley headquarters in New York.
Victor J. Blue | Bloomberg | Getty Images
Pigeons sit on a traffic light in front of the Morgan Stanley headquarters in New York.

Deutsche Bank raised its rating on Morgan Stanley to buy from hold, citing a turnaround in its securities trading businesses.

"We continue to prefer market sensitive banks over large regionals. This reflects lower relative valuations vs. historical levels, and potentially more leverage from a softening regulatory environment and stronger economic backdrop," analyst Matt O'Connor wrote in a note to clients Tuesday. "Within the market sensitive group, we are upgrading MS. … This reflects a combination of the … sell off in the recent weeks, our general optimism surrounding capital markets, and a quicker and more meaningful improvement in MS' FICC [fixed income, currencies and commodities] businesses than we had expected."

"Within the market sensitive group, we are upgrading MS. … This reflects a combination of the … sell-off in the recent weeks, our general optimism surrounding capital markets, and a quicker and more meaningful improvement in MS' FICC [fixed income, currencies and commodities] businesses than we had expected."

Morgan Stanley shares are up 25 percent since the Nov. 8 election through Tuesday. However, the shares are down 9 percent since Mar. 3.