JP Morgan changed its preference to traditional, credit-exposed banks from investment banks after regulators pledged to toughen capital rules for financial institutions, Reuters reported Wednesday, quoting research by the bank.
Profitability for investment banks will likely fall by nearly a third over the long term because of the new measures, the Financial Times quoted a report by JP Morgan as saying.
Return on equity at investment banks are likely to fall to 11 percent in 2011 from around 15 percent, according to the report quoted by the paper.
JP Morgan cut Deutsche Bank's price target to 53 euros ($76) from 56 euros. It cut UBS to neutral from overweight but raised its price target to 20 Swiss Francs ($20.8) from 17.
It upgraded BNP Paribas to overweight and raised its price target to 66 euros from 50 euros. JP Morgan also raised price targets for Credit Suisse and Societe Generale.