European Banks: A Look At Valuation Post-Stress Tests

European banks are still trading on a 48% discount to the market on price-to-book and with potential for stronger loan growth and lower provisions, which makes the sector’s relative valuations attractive, notes Morgan Stanley. Morgan Stanley looks at the sector with a focus on valuation after most of the attention this week was on stress tests. Sebastian Raedler and the team at Morgan Stanley in their report dated October 27, 2014 on “European Strategy” also remain Overweight on European equities as the deflation scare abates. Positive impact from ECB’s AQR and EBA’s stress tests The Morgan Stanley analysts note the…