Goldman Sachs and lowered its price objective to $105 from $122
The shares of Morgan Stanley (NYSE: MS) are 1.8% lower in pre-market trading, after Goldman Sachs downgraded it to "neutral" from "buy," and lowered its price objective to $105 from $122. The analyst said it anticipates a shift in the investment banking cycle, in which other big-name banks will benefit.
Coming into today, the majority of covering brokerages were hesitant towards MS. Of the 22 in coverage, 14 rated it a "hold" or worse, while eight still recommended a "strong buy." Plus, the 12-month average target price of $104.41 is an 8% premium to MS' last close. This suggests there is still room for some analysts to change their tune on the security.
Short-term options traders, meanwhile, are very bearish. This is per Morgan Stanley stock's Schaeffer's put/call open interest ratio (SOIR) of 1.16, which ranks in the 92nd percentile of annual readings.
MS is on track to open just above the $95 area, and may start consolidating below its 140-day moving average. Should these pre-market losses hold, the security will also eat away at its already slim 3.6% year-to-date lead.
Also worth noting is Morgan Stanley stock's Schaeffer's Volatility Scorecard (SVS), which ranks at an elevated 85 out of 100. In simpler terms, the stock has tended to exceed option traders' volatility expectations during the past year, which is a good thing for option buyers.