Morgan Stanley Upgrades Valley National Bancorp (VLY) Stock to Overweight, Raises PT

Valley National Bancorp (NASDAQ:VLY) is one of the Most Undervalued Stocks Under $10 to Buy Now. Morgan Stanley upgraded the company’s stock to “Overweight” from “Equal Weight” with a price objective of $11, up from the prior target of $10, as reported by The Fly. This upgrade reflects the company’s actions over the past 12 months to improve its balance sheet, reduce the commercial real estate concentration, increase reserve ratios, as well as build capital.

Notably, the firm also noted that Valley National Bancorp (NASDAQ:VLY) has successfully lowered its deposit costs to improve NIM, and additional improvement is anticipated when interest rates decrease further. Overall, the firm’s analyst opines that the balance sheet improvement and earnings growth story are not being reflected in the current valuation. In Q1 2025, Valley National Bancorp (NASDAQ:VLY) saw continued improvement in its funding base. The core deposit growth enabled it to further reduce its dependency on the indirect deposits, benefiting its revenue and NIM.

Furthermore, the company expects that additional core deposit growth can create a sustainable tailwind amidst the volatile current operating environment.

Valley National Bancorp (NASDAQ:VLY) operates as the holding company for Valley National Bank, which offers commercial, private banking, retail, insurance, and wealth management financial services products.

While we acknowledge the potential of VLY as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 13 Cheap AI Stocks to Buy According to Analysts and 11 Unstoppable Growth Stocks to Invest in Now

Disclosure: None. This article is originally published at Insider Monkey.