UPDATE: ISI Group Reiterates Hold Rating, Raises PT on Morgan Stanley

In a report published Friday, ISI Group reiterated its Hold rating on Morgan Stanley MS, and raised its price target to $20.00. ISI Group noted, “We are increasing our 4Q operating EPS estimate to $0.25 from $0.15 after a better than expected December in terms of both investment banking and trading activity. We are also modestly increasing our 2013-14 EPS estimates to $1.90 (old $1.85), and $2.15 (old $2.10) based on a modestly better revenue outlook. Importantly, our 4Q12 estimates exclude any DVA impact. MS credit spreads now imply a DVA loss of about $550mn or $0.20 p.s. for 4Q, implying GAAP EPS of about $0.05.” Morgan Stanley closed on Thursday at $19.58.