Northern Trust downgraded to Underweight from Equal Weight at Morgan Stanley

Morgan Stanley downgraded Northern Trust to Underweight from Equal Weight with a price target of $86, up from $82. The analyst upgraded the large cap bank group to Attractive, saying it looks like Basel endgame “will be lightened.” This opens the door for a significant increase in buybacks, as large cap banks have the highest excess capital levels ever, at a time when the capital markets are rebounding, the analyst tells investors in a research note. The firm cites valuation for the downgrade of Northern Trust. The stock is trading at an 8% cost of equity, the most expensive large cap bank stock in the group, contends Morgan Stanley.