Goldman, Morgan Stanley Raised; Deutsche Top Pick at JPMorgan
(Bloomberg) -- Goldman Sachs rating raised to overweight from underweight, Morgan Stanley raised to overweight from neutral with Deutsche Bank top pick in global banks pecking order, JPMorgan says in two notes on banks today.
- Goldman Sachs is top pick among U.S. peers
- Sees no liquidity crisis in European investment banks, including Deutsche Bank
- No positive risk/reward at Credit Suisse, cuts to neutral vs overweight
- Global IB ranking in order: Deutsche Bank, Goldman Sachs, Morgan Stanley, Barclays, UBS, Credit Suisse, Societe Generale, BNP Paribas
- European IBs face earnings risk from tough credit trading environment, low deal flows, weak equity markets
- Sees 2016 FICC down 18% y/y, Equities down 16%, IBD down 29%
- Sees 2016 IB revenues down 21% and 2017 revenues rising 7%
- Raises global IB sector to overweight
- Don’t buy European banks yet as earnings, dividends will surprise on downside
- U.S. banks offer better value
- Among Europeans, focus on dividend delivery such as at Danske, Lloyds, Erste
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Alert:
HALISTERSource: BFW (Bloomberg First Word)
Tickers MS US (Morgan Stanley)
GLE FP (Societe Generale SA)
GS US (Goldman Sachs Group Inc/The)
DBK GR (Deutsche Bank AG)
BNP FP (BNP Paribas SA)
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