Before Monday’s opening bell, Credit Suisse raised its price target on Goldman Sachs (GS) and Morgan Stanley (MS). Here’s what the moves mean for mutual fund investors.
Inside the Analyst Moves
Goldman Sachs
The analyst has maintained an “Outperform” rating on GS, and has boosted its price target from $200 to $225. This new price target suggests a 15% upside from the stock’s current price.
Morgan Stanley
A “Neutral” rating was reiterated on MS. The firm has raised its price target on MS from $36 to $41, suggesting a 5% upside.
The firm expects to see solid results from the brokerage industry as equities have benefited from volatility during the quarter.
IPOs Could Continue to Benefit Brokers
We can see the potential on why the analyst raised the price targets on these companies. However, it is notable to mention that the great IPO market has not be accounted for in the upgrades. In 2014, the IPO market was steller. If this trend continues in 2015, companies like Goldman Sachs and Morgan Stanley could benefit.
Mutual Funds to Watch
Investors seeking exposure to Goldman Sachs and Morgan Stanley may consider a mutual fund investment as an alternative to directly owning the stocks. The mutual funds below currently hold the largest stakes in the two companies.
Goldman Sachs
| Symbol | Mutual Fund | Stake |
|---|---|---|
| FCNTX | Fidelity® Contrafund® | 1.71% |
| VTSMX | Vanguard Total Stock Market Index | 1.60% |
| VFIAX | Vanguard 500 Index | 1.01% |
Morgan Stanley
| Symbol | Mutual Fund | Stake |
|---|---|---|
| VTSMX | Vanguard Total Stock Market Index | 1.25% |
| VFIAX | Vanguard 500 Index | 0.84% |
| TRVLX | T. Rowe Price Value | 0.57% |
The Bottom Line
The funds above offer investors a diversified bundle of securities and industries. Investors interested in Goldman Sachs or Morgan Stanley may also be interested in JP Morgan (JPM) and Bank of America (BAC).