Morgan Stanley has a negative stance on the major banks believing EPS and dividend growth prospects are modest due to competitive forces and material upgrades are unlikely.

While active buybacks could provide some share price support, the analysts believe they are incremental to valuation and already captured in investors' expectations.

The broker's current order of preference is National Australia Bank, ANZ Bank, Westpac and CommBank.

The target for ANZ Bank rises to $27.80 from $27.70. Industry View: In-line.

Industry view: In-Line.

Sector: Banks.

Target price is $27.80.Current Price is $28.26. Difference: ($0.46) - (brackets indicate current price is over target). If ANZ meets the Morgan Stanley target it will return approximately -2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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