Citi analyst Keith Horowitz downgraded Morgan Stanley (NYSE: MS) to Neutral from Buy with a $100 per share price target, citing valuation.

Morgan Stanley stock rose nearly 6% yesterday after the company reported its results and offered positive commentary on net interest income (NII) in Q123.

Despite believing that MS is a best-positioned bank “due to strong WM growth engine, low credit risk, and positive optionality on IB revenues,” Horowitz sees a fundamentally challenging year for banks.

“We believe it’s hard to make the case for significant multiple expansion from here and downgrade to Neutral while maintaining $100 target price,” the analyst wrote in a downgrade note.

On a more positive note, the analyst sees the potential for positive EPS revisions while other banks could be the subject of negative revisions.

By Senad Karaahmetovic