December 17, 2008 / 7:38 PM / 10 years ago

UPDATE 1-Analyst Bove ups Morgan Stanley price target by 20 pct

Dec 17 (Reuters) - Veteran banking analyst Richard Bove raised his price target and 2009 profit view on Morgan Stanley (MS.N) saying that many of the charges recorded by the bank in the fourth quarter may not be repeated.

Shares of the company were trading up more than 10 percent at $17.76 in afternoon trade on the New York Stock Exchange.

Earlier in the day, the stock had fallen as much as 8 percent following a wider-than-expected $2.2 billion quarterly loss as plummeting markets generated more writedowns.

The debate over the fairness of the writedowns continue but it seems likely that some of these amounts will be reversed when and if private sector interest rates fall, Ladenburg Thalmann’s Bove wrote in a note to clients.

The company is in the process of dramatically reducing the size of its balance sheet, said Bove, who increased his price target on the stock by 20 percent to $18.

Bove raised his 2009 calendar year profit estimate on the company by 5 percent to $2.36 a share. He maintained his “neutral” rating on the stock. (Reporting by Sweta Singh in Bangalore, Editing by Dinesh Nair )

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