Time To Buy Battered Morgan Stanley (MS), Says Battered Wachovia (WB)

Wachovia (WB) tries to call the bottom in one of the financials, upgrading Morgan Stanley (MS) from Market Perform to OUTPERFORM. Wachovia cited the following reasons for the bullishness:

  • the retail brokerage unit should be valued higher due to its recurring revenue streams [in a recession?]
  • there is shrinking competition in prime brokerage [fair enough]
  • deleveraging [hmmm…in the old days, this made i-banks worth less, not more, because earnings growth slows. But could this mean investors are finally valuing attention to risk?]
  • continued strength in commodities [for now]

See Also:

S&P Cuts Debt Ratings on Morgan Stanley (MS), Merrill (MER), Lehman (LEH) (MER, LEH, MS)

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