The Point for North America

Research evidence excerpt

The Point for North America

Morgan Stanley (MS.N) - 2Q26 Review -Multiple Growth Engines With Equities

Driving Estimates Higher; Raise PT to $235

MS lagged on earnings day (up ~0.4% vs BKX up 1.5%), though we think much of

the reaction was captured in the prior day's relative outperformance (up ~3% vs

BKX up ~1%) following strong read-through from peers. The strong print and

constructive commentary reinforces that the environment remains highly

supportive for capital markets. While we remain more confident in the

sustainability in banking revenues given strong backlogs, equities trading

revenues appear to have shifted structurally higher and with Asia a key driver of

client activity, MS is among best-positioned given its global franchise. WM only

adds to the durability of MS' revenue profile and stands to benefit from stronger

IPO activity to be captured in their client asset mousetrap. We raise estimates

higher largely on stronger equities with returns at 23%+ through '27 even despite

the drag of substantial excess capital, and raise PT to $235 on improved return

outlook.

Benjamin Gerlinger

Merck & Co (MRK.N) - Lipfendra approval supports growing cardiometabolic

portfolio

Merck announced the approval of Lipfendra (oral PSCK9; enlicitide) to reduce LDL-

C in adults with hypercholesterolemia. Built on positive data (note here), Lipfendra

is the first approved oral PCSK9 inhibitor, allowing Merck to bring a well-

established LDL-C lowering mechanism into a more convenient format. The phase

3 dataset supports a competitive efficacy profile, with placebo-adjusted LDL-C

reductions of 56% (CORALreef Lipids) and 59% (CORALreef HeFH) and a clean

overall tolerability profile. The next update on deck for the program is CORALreef