Sep. 15 at 3:43 PM
Despite Bank of America forecasting a weak third quarter, and the stock slipping over 5% Monday in response, Morgan Stanley expects a rebound in the fourth quarter and sees the stock’s reaction as overdone.
“Weaker capital markets activity in 3Q drove a cut to the full-year operating leverage guide, but >5% stock decline was significantly higher than our 1.5% EPS cut,” said Manan Gosalia, Morgan Stanley’s equity analyst, in a note to clients on Tuesday.
The analyst said that third-quarter investment banking fees are expected at
$1.6 billion to
$1.8 billion, down about 11% to 21% from a year earlier. Third-quarter expenses are expected at
$18.6 billion, compared with Morgan Stanley’s consensus estimate of
$18.3 billion.
$BAC