UPDATE: Morgan Stanley Downgrades U.S. Bancorp to Equal-Weight on Valuation

Morgan Stanley reduced its rating on U.S. Bancorp

from Overweight to Equal-weight with a reiterated $35 price target. Morgan Stanley commented, "Stock approaching fair value… currently trades at 1.5x 2014e P/B on 16% 2014 ROE. Higher capital return, lower earnings volatility largely priced in. Given USB has best in class efficiency ratios, it has less room to manage costs down from current levels relative to peers." U.S. Bancorp closed at $32.57 on Tuesday.