Morgan Stanley Highly Bullish on These PSU Banks, Hikes Target Prices

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Morgan Stanley Highly Bullish on These PSU Banks, Hikes Target Prices
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By Malvika Gurung

Investing.com -- Despite a gloomy session on Dalal Street on Tuesday, PSU banking stocks are trading higher and have been on investors’ watchlists for the past 6 months.

The global research giant Morgan Stanley (NYSE: MS ) has hiked its target prices for three state-owned lenders, in a recent note provided to the media.

The investment banking major MS has maintained an overweight rating on two public sector banks - Bank of Baroda (NS: BOB ) and Bank of India (NS: BOI ), along with an equal-weight rating on the banking giant Punjab National Bank (NS: PNBK ).

Morgan Stanley is of the opinion that the ongoing recovery cycle has been benefitting the PSU banks, with BoB and BoI showcasing the best relative risk-to-reward ratio. Further, PSU stocks have trumped their cyclical and defensive counterparts on a YTD basis.

Bank of Baroda’s target price has been hiked by MS from Rs 195/share to Rs 220 apiece, an upside of 27% compared to the current share price, while Bank of India’s target has been increased to Rs 125 from Rs 95, an upside of 39.2%. For PNB, the global brokerage has raised its target price from Rs 40 to Rs 60 apiece.

On the country’s star PSU bank State Bank of India (NS: SBI ), MS has maintained an overweight call, with a target price of Rs 715/share, while the investment bank has held its underweight call on Canara Bank (NS: CNBK ), raising its target price from Rs 280 to Rs 345 apiece.

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