Commerce Bancshares downgraded to Equal Weight from Overweight at Morgan Stanley

Morgan Stanley downgraded Commerce Bancshares to Equal Weight from Overweight with a price target of $64, down from $66. The firm says a faster pace of interest rate cuts is positive for net interest margin at mid-cap banks and more mixed for large-cap banks. Commerce Bancshares is a “defensive play” and has less room to cut deposit costs as the Fed cuts rates, given it outperformed peers by a wide margin when the Fed raised rates, the analyst tells investors in a research note. As such, Morgan Stanley sees less relative upside in the shares.