In a new report, Morgan Stanley analyst Betsy Graseck discusses the firm’s bullish outlook for large-cap bank stocks. While Morgan Stanley’s forecast for Q2 earnings season is mostly in-line with consensus, Graseck believes that the guidance issued by many big-name banks will soon start to significantly improve.

Q2 Preview

According to the report, bank shareholders should keep expectations low heading into Q2 earnings, but the forward-looking nature of the stock market could begin to boost bank stocks well ahead of fundamental improvements to the banking environment.

“Higher rates, a strong spring selling season, and record M&A volumes all position banks well for 2H15 and beyond,” Graseck explains.

Key Earnings Themes To Watch

Graseck lists…

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