UPDATE: Morgan Stanley Downgrades Commerce Bancshares to Underweight on NIM Pressure

Morgan Stanley reduced its rating on Commerce Bancshares (NASDAQ: CBSH) from Equal-weight to Underweight while lowering its price target from $43 to $40.

Morgan Stanley commented, "We are 9% below consensus in 2013 and 20% below in 2014. Aside from the Street still not having adjusted EPS for the recent 5% stock dividend, we are below due to our expectation for more material NIM compression and lack of balance sheet growth. As consensus estimates decline, we expect the shares to underperform its midcap bank peers."

Commerce Bancshares closed at $38.76 on Tuesday.

(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.