This bank stock is getting ‘downgrades’ amidst talks of higher interest rates

The U.S. Federal Reserve is expected to raise interest rates next year. Naturally, financials are gaining more traction as they tend to do well in such an economic environment.

But there is one stock in the banking space that is not getting the same love as its peers.

Mike Mayo rates Morgan Stanley at ‘neutral’

Wells Fargo’s Mike Mayo gave Morgan Stanley (NYSE: MS) a “neutral” rating on Wednesday, contrasting his unflinching support for rivals like JPMorgan Chase, Goldman Sachs, U.S. Bancorp, and PNC Financial.

Mayo expects the “tech-driven revolution” to help banks achieve record efficiencies and sharply expand profit margins. In the case of Morgan Stanley, however, he said on CNBC’s “Halftime Report”:

Mayo’s comments on the bank’s E-Trade acquisition

Morgan Stanley bought E-Trade late last year, but Mayo said the acquisition's success is yet to be determined. He added:

Mayo’s rating comes a day after Oppenheimer and Berenberg downgraded MS on “valuation” and “no absolute upside”. Shares of Morgan Stanley are up about 45% this year.