UPDATE: Morgan Stanley Upgrades BB&T Corporation to Overweight, Raises PT on Declining Expenses in 2H14

In a report published Wednesday, Morgan Stanley analyst Betsy L. Graseck upgraded the rating on

from Equal-Weight to Overweight, and raised the price target from $39.00 to $40.00. In the report, Morgan Stanley noted, “We are Overweight BBT as we expect cost saves to accelerate in 2014 as elevated technology and regulatory compliance costs abate and loan growth accelerates. We're modeling a 1% point decline in the expense ratio in 2014 (from 60% to 59%) and a further 2% point decline in 2015. Valuation attractive at 1.06x 2015e BVPS vs our 11.5% ROE estimate. Our $40 PT is based on 1.23x 2015 BVPS on ROE of 11.5%, implying 11.3x P/E.” BB&T Corporation closed on Tuesday at $34.29.