Citi Maintains Hold Rating On MS

Citi reports that while it expects Morgan Stanley MS to see improvement in fixed income trading, “the challenges are large and expect it will take longer than expected to see meaningful increase in fixed income trading revenue share.”

“With the stock trading at slightly less than 1.0x our 12 mo forward tangible book value estimate vs our expectation of only 9-10% ROTE, we see limited upside in the stock,” Citi writes. “Plus, we also see downside to estimates (we are at $2.50 for 2011 vs consensus of $2.80).”

Citi is maintaining its Hold rating on Morgan Stanley, which currently trades at $28.41.