TD Cowen Initiates Goldman Sachs Coverage at Buy, Morgan Stanley at Hold

TD Cowen resumed coverage of a group of 16 large-cap U.S. banks and initiated Goldman Sachs at Buy and Morgan Stanley at Hold, citing strong fundamentals but demanding valuations.

R. Scott Siefers said fundamentals across the group are strong but valuations warrant a selective approach. The firm’s coverage includes two of Wall Street’s largest investment banks.

Goldman Sachs’ Buy rating reflects expectations for multiyear growth in investment banking. Its mergers-and-acquisitions and equity-capital-markets businesses are central to that outlook, while its asset- and wealth-management operations may help reduce the bank’s valuation gap with peers.

Morgan Stanley received a Hold rating despite having strong and balanced businesses. The main concerns are its premium valuation and whether elevated markets revenue can continue at current levels.