After 11 of the largest banks placed $30B of deposits at First Republic and the bank announced that borrowings from the Federal Reserve varied from $20B to $109B between March 10 and March 15, Morgan Stanley said the firm thinks this implies a deposit outflow of about $86B, which it estimates as equivalent to 49% of total deposits and 72% of uninsured deposits. The firm, which has an Underweight rating on First Republic shares, removed its prior price target of $97 and is moving to a "base case range" of $11 to $25 to reflect the higher level of uncertainty and "wide range" of possible outcomes, which it sees "skewing negative." However, this base case range "comes with a low level of confidence," the firm added.
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Published first on TheFly
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