UPDATE: Deutsche Bank Upgrades Morgan Stanley to Buy Following Expected EPS Ramp

In a report published Friday, Deutsche Bank analyst Matt O'Connor upgraded the rating on Morgan Stanley (NYSE: MS) from Hold to Buy, and raised the price target from $20.00 to $30.00.

In the report, Deutsche Bank noted, “MS shares are up 31% YTD vs. +16% for the S&P 500 and +21% for the BKX. Despite the big move, the stock trades at a modest discount to tangible book (pro forma for the buy-in of the remaining Wealth Mgmt JV) even though earnings momentum seems poised to accelerate. This expected ramp in EPS reflects the rise in equity markets YTD (there's a lag—so the benefit of 1Q's move up is still to come, for example), the expected buy-in of the remaining JV stake, and less drag from FICC going forward, in our view. Over time, MS also has a lot of leverage to rising rates--which seems less reflected in MS shares vs. some other banks that are also well positioned for higher rates.”

Morgan Stanley closed on Thursday at $25.82.