MARKET TALK: M Stanley Cuts Lloyds Banking To Underweight

14th Jun 2010 07:31

0631 GMT [Dow Jones] Morgan Stanley downgrades Lloyds Banking Group (LLOY.LN) to underweight from equalweight, and cuts its target price to 50p from 65p. Says Lloyds faces the biggest risk among UK banks of missing consensus beyond FY'10, given pressure on net interest margin, tepid GDP growth and industry funding strains. "Although many concerns are in the price at 1x 10E TNAV, Lloyds is a relative underweight as we see normalized returns close to cost of capital and our European Banks have 20%+ upside." Says Barclays (BARC.LN) is its top pick, with 37% to Morgan Stanley's new target price of 400p, from 425p. Has Barclays at overweight. Lloyds shares closed Friday at 54p, and Barclays at 291p. ([email protected]) Contact us in London. +44-20-7842-9464 [email protected] (END) Dow Jones Newswires June 14, 2010 02:31 ET (06:31 GMT)