January 30, 2012 at 08:59 AM EST
JPMorgan No Longer a “Conviction Buy” at Goldman, but Morgan Stanley Is (JPM, MS)

Analysts at Goldman Sachs on Monday got a bit less bullish on JPMorgan Chase & Co. (JPM), while getting more bullish on fellow investment banker Morgan Stanley (MS).

The firm said it removed JPM from its “Conviction Buy” List, but still maintained its “Buy” rating and lifted its price target from $41 to $42. That new target suggests a 13% upside to the stock’s Friday closing price of $37.21.

Goldman noted that while it still likes JPMorgan, they see little room for further earnings growth this year.

Meanwhile, the firm upgraded JPM rival Morgan Stanley from “Neutral” to “Conviction Buy” with a $23 price target, which implies a 24% upside to the stock’s Friday closing price of $18.56.

Goldman noted that it sees improving margins for the company, as well as asset price recovery and higher client activity.

JPMorgan shares fell 63 cents, or -1.7%, in premarket trading Monday, while Morgan Stanley posted small gains.

The Bottom Line
Shares of JP Morgan (JPM) have a 2.69% dividend yield, based on Friday’s closing stock price of $37.21. The stock has technical support in the $31-$33 price area. If the shares can firm up, we see overhead resistance around the $40 price level. Shares of Morgan Stanley (MS) have a 1.08% dividend yield, based on Friday’s closing stock price of $18.56. The stock has technical support in the $16 price area. If the shares can firm up, we see overhead resistance around the $20 price level.

JPMorgan Chase & Co. (JPM) and Morgan Stanley (MS) are not currently recommended by Dividend.com.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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