Banks Slip on Morgan Stanley Double-Downgrades in Consumer Shift
- Analyst Graseck says to sell JPMorgan, BofA, Goldman
- At the same time, she sees consumer finance set to rally
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Big bank stocks fell Monday after a Morgan Stanley analyst shuffled her ratings -- including double-downgrading JPMorgan Chase & Co. and Bank of America Corp. to underweight -- to reflect a new preference for consumer finance firms.
The downgrades were part of a broader shift, as analyst Betsy Graseck increased her price targets across the board and raised the large-cap bank and consumer finance sector as a whole to “attractive” from in-line. Like others, Graseck sees coming Covid-19 vaccines as likely to end the current recession, while spurring economic activity and more lending. She expects a “wave” of reserve releases and capital returns over the next two years.