Piper Sandler analyst Jeffery Harte downgraded Morgan Stanley based on valuation.
Harte wrote that the stock's recent appreciation after reporting strong earnings results for the fourth quarter of 2019 has meaningfully narrowed the gap between its valuation and underlying fundamentals.
The analyst sees reduced potential for outperformance now that the stock is trading at 10.5x forward EPS and 1.4x tangible book value.
Harte downgraded Morgan Stanley to "neutral" from "overweight" and raised the price target to $59 from $56. He increased the EPS estimate for 2020 to $5.30 from $5.20 and initiated a 2021 EPS estimate of $5.86.