Buy-Side Analysts Favor US Financial Sector: Morgan Stanley
Investors are bullish on the US financial sector, with 28% predicting it will be the best performing sector this year (more than any other sector) in a recent Morgan Stanley survey, despite the fact that banks and life insurance firms are already at the top of their historical range for price-to-book valuations and MS predicts only gradual return on equity (ROE) improvements this year.
Financial sector valuations tied to ROE
“Within Financials, Price/Book multiples are closely tied to the ROE performance of . . .
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