Investors should buy shares of JPMorgan Chase for 2023, according to Morgan Stanley. Analyst Betsy Graseck double upgraded the bank’s stock to overweight from underweight, saying JPMorgan will have positive operating leverage next year. Operating leverage indicates how well a company can raise operating income by generating revenue. “[We] double upgrade JPM to Overweight from Underweight on operating leverage inflecting positively, CCB (JPM’s Consumer & Community Bank) taking market share, relative multiple resiliency during recessions, and progress being made on higher CET1 (common equity tier 1) ratio regulatory requirements,” Graseck wrote in a Tuesday note. JPMorgan has struggled this year as U.S. economic activity became more sluggish, with the stock down 17% in that time. That’s a slightly bigger decline than the S & P 500’s 16.1% loss for 2022. Still, her $153 price target, raised from $126, implies about 16% upside from Monday’s close. Shares of JPMorgan rose 1.8% in Tuesday premarket trading. The analyst said negative operating leverage in 2022 was a “key reason” for her underweight rating, “as operating leverage is the biggest driver of large cap bank stock alpha.” The firm expects JPMorgan will deliver 110 basis points of positive operating leverage in 2023, with revenues up 10% and expenses up 9% year over year. “While 110bps isn’t an eye-popping number, it’s a significant inflection from the last two years of negative operating leverage at JPM (-510bps in 2021,est. -260bps in 2022),” Graseck wrote. Meanwhile, JPMorgan is making progress on higher regulatory capital requirements, and taking deposit share across the country, according to the analyst. The firm also de-rates less than peers during a recession. —CNBC’s Michael Bloom contributed to this report.