Goldman Sachs Group Inc.'s stock surged 2.4% in premarket trade Tuesday, after J.P. Morgan did an about face on the investment bank, turning to bullish from bearish. Analyst Kian Abouhossein raised his rating to overweight from underweight, and boosted the stock price target to $180 from $170. "We see [Goldman] as a Tier 1 player in both fixed income and equities," Abouhossein wrote in a note to clients. "Hence we expect [Goldman] to perform better than peers in the current challenging revenue environment." Abouhossein also upgraded Morgan Stanley, moving to overweight from neutral, on the belief that the investment bank is making the right move by shrinking its fixed income, currency and commodities trading business. The stock shot up 2.9% premarket. Abouhossein believes the stock's current valuation discount to tangible book value is "unjustified" considering Morgan Stanley has bought back 23% of its market capitalization over the last three years. Goldman's stock had tumbled 24% over the past three months through Friday, and Morgan Stanley shares had plunged 32%, while the Dow Jones Industrial Average has lost 8.6%.
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