Valley National upgraded to Equal Weight from Underweight at Morgan Stanley

Morgan Stanley upgraded Valley National to Equal Weight from Underweight with a price target of $9.50, up from $8. The analyst says interest rate cuts reduce funding costs, stimulate loan demand, and are credit positive for the midcap banks. The Q2 reports provided increasing conviction that we are at an inflection for net interest income with steady NII growth through 2025, the analyst tells investors in a research note. It says valuations are cheap at a four-times discount relative to history. As such, Morgan Stanley upgraded its industry group to Attractive. It cites Valley’s reduced commercial real real estate exposure and potential benefits from rate cuts for the upgrade.