Credit Suisse Raises Price Targets On Goldman Sachs, Morgan Stanley

Credit Suisse issued its Q4 outlook on U.S. brokers Monday and expected “solid results” for the industry “despite what seems to have been a turbulent quarter (Oct 15th volatility, HY & Energy price declines, Russia).”

Analyst Christian Bolu noted that “increased volatility during the quarter was beneficial for equities trading, but drove a slowdown in underwriting and FICC.

“Looking forward, we continue to believe healthy investment banking backlogs and the potential for higher volatility/trading activity bode well for earnings growth through 2015.”

The firm raised its price target on Goldman Sachs Group Inc (NYSE: GS) from $200 to $225 and maintained an Outperform rating. Bolu expected “healthy equities results, solid I&L performance and continued comp discipline. All in all, we are expecting an industry leading 12 percent ROE” and 11 percent ROE for the full year.

Morgan Stanley (NYSE: MS) was rated Neutral and had its price target raised from $36 to $41. Bolu anticipated “another quarter of steady franchise progress–-continued core GWM margin expansion (21.9 percent vs. 21.3 percent in 3Q) should be supported by strength in equities. Looking forward, we bump up our 2015/2016 estimates to factor in a mid-2015 Fed rate hike – we'd previously assumed early 2016 first hike.”

Goldman Sachs recently traded at $193.23, down 0.61 percent.

Morgan Stanley recently traded at $38.34, down 0.96 percent.