Credit Suisse Thoughts on Morgan Stanley (MS) Acquiring Eaton Vance

Credit Suisse analyst Susan Roth Katzke reiterated an Outperform rating and $58.00 price target on Morgan Stanley (NYSE: MS) after the company announced that it had entered into a definitive agreement to acquire Eaton Vance for ~$7 billion. A transaction that is consistent with Morgan
Stanley’s articulated strategy of shifting the bank’s earnings mix further in favor of Wealth and
Investment Management.

The analyst stated "from a financial perspective, with the expected 100bps improvement in ROTCE, the transaction improves and accelerates prospects for achievement of management’s longer term 15-17% ROTE target. What’s not to like… book value dilution and integration risk--always present, the bank now has a full plate with E*Trade underway and now Eaton Vance. Bottom line… consistency and clarity of strategy, furthered via another financially and strategically accretive transaction, supports our investment thesis".

For an analyst ratings summary and ratings history on Morgan Stanley click here. For more ratings news on Morgan Stanley click here.

Shares of Morgan Stanley closed at $49.44 yesterday.

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