** Morgan Stanley upgrades regional lender Valley National Bancorp VLY.O to "overweight" from "equal weight" rating, citing balance sheet improvement

** Highlights VLY's "significant" actions to reduce its concentration in commercial real estate, increase reserve ratio, and build capital

** Adds, bank has driven down deposit costs to improve net interest margin $(NIM)$

** "We have high conviction in our 30% EPS growth forecast for 2026 driven by higher NIM, lower deposit costs, normalized provision and accelerating loan growth" - Brokerage

** Brokerage raises PT to $11 from $10, a nearly 17.8% upside on stock's last close

** Five of 11 brokerages rate it "buy" or higher, six "hold"; median PT $10 - data compiled by LSEG

** As of last close, stock up about 3.1% YTD

(Reporting by Prakhar Srivastava in Bengaluru)

((Prakhar.srivastava2@thomsonreuters.com))