Credit Suisse has a mixed outlook for the third quarter, for investment banks. Analyst Howard Chen on Wednesday said that "global capital markets conditions had a fair August - risky asset prices broadly continue to hold in, fixed income market conditions remain resilient thanks in part to continued healthy tone to the credit markets and client positioning ahead of central bank actions (both here and abroad) and we did see glimpses of new M&A deal announcements in what is traditionally a very quiet season." Still, Chen said that third-quarter "investment banking activity has been a mixed bag," and that "M&A has been overall weak--completed M&A is down 12% qtr/qtr; announced M&A is down 9% qtr/qtr." Trading revenue remains pressured, as "calendar third quarter-to-date, global exchange volumes are lower from both year-ago and second quarter levels," and Chen expects "an 8% decrease in retail trading activity during the third quarter relative to the second quarter driven by continued uncertain market conditions and weak retail trading environment." Morgan Stanley is among Chen's "top picks for the next twelve months," along with Goldman Sachs ( GS), Blackstone ( BX), Apollo Global Management ( APO), Carlyle Group ( CG), Lazard ( LAZ), CME Group ( CME) and Intercontinental Exchange ( ICE). Chen's price target for Morgan Stanley is $22, and the analyst estimates the company will earn 25 cents a share for 2012, followed by EPS of $2.05 in 2013. CLSA analyst Mike Mayo on Tuesday upgraded Morgan Stanley to a "Buy" rating from an "Outperform" rating, while raising his price target for the shares to $23 from $16, saying that "since six weeks ago when we began recommending the stock for the first time since the financial crisis, after the dismal 2Q12 results, we are further convinced that either management realizes more of the franchise value or investors will increasingly pressure management for improved results." Mayo said "we see a consensus among investors for more aggressive restructuring" of Morgan Stanley's trading operations, adding that "the stock is priced near a crisis-low valuation of 0.5x tangible book value vs 0.3x during the crisis period, despite a much lower risk profile," and that "our sum-of-the-parts analysis shows the firm is worth $16-32/share."