Morgan Stanley analyst Betsey Graseck is Overweight on big banks following Donald Trump's win and the Republican sweep of the 2024 election.
Expert Ideas: On Monday, Graseck listed three main factors for Morgan Stanley's positive outlook on large-cap banks heading into 2025. She sees capital markets rebounding, the end of quantitative tightening and a stabilizing regulatory environment as beneficial to the industry.
"We're really looking for stabilization in large cap bank regulation, and that's a positive, because elimination of a negative is a good thing," Graseck told CNBC's Squawk Box on Wednesday.
Upgrades: Morgan Stanley upgraded all of the trust banks within its coverage and pointed to the end of quantitative tightening as the driver behind the upgrades. The firm sees deposit growth of between 3% and 7% which would benefit the trust banks as they skew to large institutional asset manager clients.
- Graseck upgraded Bank of New York Mellon Corp.
(BK ) from Equal-Weight to Overweight and raised the price target from $82 to $94. - The firm upgraded Northern Trust Corp.
(NTRS ) from Underweight to Equal-Weight and raised its price target from $103 to $127. - Morgan Stanley also upgraded State Street Corp.
(STT ) from Equal-Weight to Overweight and raised the price target from $102 to $139.
