UBS Upgrades Morgan Stanley to Buy, Sees 18% Upside to $196
UBS raised Morgan Stanley’s rating from Neutral to Buy and set a 12-month target of $196, implying 18% upside from current levels. Analysts cited best-in-class profitability, wealth management strength, potential advisory and IPO catalysts, plus EPS forecasts of $11.75 for 2026 and $12.60 for 2027.
1. UBS Raises Morgan Stanley Rating
UBS analysts moved Morgan Stanley’s rating from Neutral to Buy, basing the upgrade on the firm’s resilient margins and growth prospects. They set a 12-month price target of $196, representing an 18% gain from prevailing share levels.
2. Profitability and Growth Catalysts
The upgrade highlights Morgan Stanley’s best-in-class return on equity and steady net interest margin. Analysts pointed to strength in advisory services, the pipeline of large IPOs and momentum in the wealth management division as key growth drivers.
3. Earnings Forecasts and Valuation
UBS projected earnings per share of $11.75 for 2026 and $12.60 for 2027, underscoring confidence in future cash flow growth. While noting that traditional valuation multiples appear rich, analysts argue that underlying performance warrants a premium.
4. Regulatory and AI Considerations
The report noted that potential industry-wide deregulation has yet to be fully reflected in Morgan Stanley’s share price. UBS also cited the firm’s track record of acquisitions and early AI integration as factors that should support long-term market leadership.