Morgan Stanley Upgrades Brazil Equities to Overweight, Forecasts 10% Upside

Key Facts

1Morgan Stanley's equity strategy team upgraded Brazil to overweight following the first-round election results.

2The bank sees a further 10% upside in equities and the Brazilian real by year-end as risk premia compress.

Morgan Stanley's equity strategy team upgraded Brazil to overweight following the first-round election results. Investinglive reported that the bank forecasts a further 10% upside in both equities and the Brazilian real by the end of the year as risk premia compress. The upgrade follows what the bank describes as a market "honeymoon stage" triggered by the recent polling outcomes.

The bank's outlook is driven by low local equity allocations and the potential for a significant capital rotation from debt to equity if fiscal consolidation leads to lower real rates. Regarding financial sector performance, Morgan Stanley shares closed at $191.02 on October 6, 2026, while peer Goldman Sachs closed at $897.18 and JPMorgan Chase finished at $331.28 on the same date.