NEW YORK (AP) -- A Deutsche Bank analyst on Friday upgraded Morgan Stanley to "Buy" from "Hold," saying that while the shares have posted impressive gains recently, they're still undervalued.
THE OPINION: Matt O'Connor noted that Morgan Stanley shares are up 31 percent so far this year, while shares banks overall have risen about 21 percent. Despite the run up, the shares are still trading below the bank's value, even though its earnings growth is poised to pick up.
O'Connor said Morgan Stanley's wealth management division should get a boost once it gets regulatory approval to buy out Citi's remaining 35 percent stake in its retail brokerage. He noted that Morgan Stanley has estimated that the move will boost its earnings by about $400 million, but said he thinks there could be even more of a boost over time.
Meanwhile, the analyst said he expects the bank's fixed-income, currencies and commodities business to be less of a drag on its finances going forward.
THE SHARES: Up 38 cents to $26.20 in afternoon trading.