Citi downgraded Morgan Stanley to neutral from buy on Thursday, saying the stock is “fairly valued.”
Shares of Morgan Stanley are up 22% year to date, trading at $48.26 at Wednesday’s close, slightly above Citi’s 12-month price target of $48. The stock was down about 0.5% in Thursday morning trading.
Citi ramped up earnings estimates for Morgan Stanley after its solid performance in the first quarter. The 2019 EPS forecast went up 30 cents to $5.05, and $5.55 for 2020.
“Strong 1Q19 results were driven by FICC and expense management,” Horowitz said. “Global Wealth Management beat expectations and [management] reiterated guidance for mid-single [net interest income] digit growth in 2019, in contrast to others in the peer group which has generally tempered NII expectations during this earnings season.”