Societe Generale (OTC:SCGLY) downgraded shares of Morgan Stanley (MS) to Hold from Buy, lowering the price target on the stock to $80 from $95 per share in a note Tuesday.

Analysts said they are lowering the rating for the bank due to rising deposit costs.

“We have viewed MS as a quality growth stock for some time, increasingly geared towards wealth and asset management via strong organic growth and astute strategic (albeit expensive) acquisitions,” the analysts noted.

However, they noted that the growth trajectory is coming under pressure from increasing deposit costs.

“MS suffered a notable 9% sequential decline in WM NII in 3Q23, reflecting a continued shift in deposits from cheap sweep deposits to more expensive time deposits,” they added. “Management guided that it expected NII to trend lower going forward, but did not provide visibility on the magnitude of the decline or timing for any trough, merely that it would depend on deposit mix and the trajectory of rates.”

The firm also fears that MS’s excess capital could flip into a deficit under Basel 4 regulations, “constraining its ability to grow.”