UPDATE: Morgan Stanley Reiterates Overweight Rating, Lowers PT on J.P. Morgan Chase & Co. as Transition Year was More Costly Than Expected

In a report published Monday, Morgan Stanley analyst Betsy L. Graseck reiterated an Overweight rating on

, but lowered the price target from $66.00 to $64.00. In the report, Morgan Stanley noted, “We expected JPM to dial-back more on expenses as it works through a tough revenue environment. Instead, JPM is continuing to invest despite near-term topline pressure. Mgmt argues that they are investing to transition the business for the future and does not want to make an irrational decision to pull back investments now for what they see as an attractive long-term opportunity to take share. Expect investors will be frustrated by this, as market share gains are not offsetting the elevated expense level at the moment. While we think this is the right long-term decision, it pushes out ROE targets and lowers our price target. We are Overweight on valuation as stock is cheap at 1.1x P/2015 TBV vs. our 2015 ROTCE est of 13.6%, but the catalyst is grindingly execution on operating leverage.” J.P. Morgan Chase & Co. closed on Friday at $55.58.