Morgan Stanley Thinks Banks With Low Loan-To-Deposit Ratios & Less Reliance On Customer Deposits Have Chance Of Winning: Here's Why
Portfolio Pulse from Lekha Gupta
Morgan Stanley analyst Manan Gosalia revised ratings for Valley National Bancorp (VLY), Zions Bancorporation N.A. (ZION), and Commerce Bancshares Inc (CBSH). Gosalia downgraded VLY and ZION to Underweight from Equal-Weight, while upgrading CBSH to Equal-Weight from Underweight. The analyst prefers banks with low loan-to-deposit ratios and less reliance on customer deposits in a higher for longer rate environment.
September 27, 2023 | 6:09 pm
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NEGATIVE IMPACT
Morgan Stanley downgraded VLY to Underweight from Equal-Weight, citing pressure on NII in a higher for longer rate environment.
The downgrade by Morgan Stanley is likely to negatively impact VLY's stock price in the short term. The analyst's concerns about pressure on NII in a higher for longer rate environment could make the stock less attractive to investors.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEGATIVE IMPACT
Morgan Stanley downgraded ZION to Underweight from Equal-Weight, citing increased risk of non interest bearing outflow in a higher for longer rate environment.
The downgrade by Morgan Stanley is likely to negatively impact ZION's stock price in the short term. The analyst's concerns about increased risk of non interest bearing outflow in a higher for longer rate environment could make the stock less attractive to investors.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
Morgan Stanley upgraded CBSH to Equal-Weight from Underweight, citing confidence in the bank's NII outlook in a higher for longer rate environment.
The upgrade by Morgan Stanley is likely to positively impact CBSH's stock price in the short term. The analyst's confidence in the bank's NII outlook in a higher for longer rate environment could make the stock more attractive to investors.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100