Is Goldman a Better Bet than Morgan Stanley? Credit Suisse Says So

Credit Suisse is expecting solid results from the brokerage industry this quarter, led by global monetary policy that will help drive trading business via healthy investment banking and improved client risk appetite.

Given a choice between Goldman Sachs Group Inc GS and Morgan Stanley MS, Credit Suisse recommends Goldman with an Outperform and price target more than 20 percent above current price. Conversely, Credit Suisse analysts have a Neutral rating on Morgan Stanley with a price target 17 percent above price.

Goldman's outperformance will be driven by year-over-year growth in its fixed income, currencies and commodities division – the first such growth since 2009. On the quarter, Credit Suisse will look to management's thoughts on the capital stress tests and whether the company has plans for "further balance sheet / capital optimization."

With regard to Morgan Stanley, Credit Suisse said it anticipates "another quarter of steady franchise progress" with "continued strength in equities trading." The analysts said they forecast a 9 percent return on equity in Q1.

Shares of Goldman are 3.3 percent lower this year, closing at $187.35 on Wednesday. Credit Suisse has a $225 price target on the stock. Shares of Morgan Stanley have fallen 8.6 percent this year. Credit Suisse's price target is $41, compared with a closing price on Wednesday of $35.45.