Morgan Stanley Downgrades East West Bancorp to Equal-weight (EWBC)

Morgan Stanley is out with its report today on East West Bancorp

, downgrading EWBC from Overweight to Equal-weight. In a note to clients, Morgan Stanley writes, "We are downgrading EWBC to EW. While we continue to view EWBC as a well-run bank with solid growth prospects, we now believe the stock is likely to perform in line with its peers, as expectations for capital deployment and strong loan growth are now reflected in the stock. The shares are trading at 2.2x TBV, a 24% premium to the group at 1.76x, and at 13.1x its 2012E EPS, in line with the group at 13.5x. While its above-peer profitability justifies a premium valuation versus its peers, in our view, it now appears this is already in the stock. We also see few catalysts that would support a materially higher multiple for the stock. Our price target is $25 (up $1)." At the time of posting, shares of EWBC were trading at $23.51, down 0.55% from Wednesday's close.