Morgan Stanley and Goldman Sachs are being punished too severely in the stock market due to worries that President Barack Obama will curtail the future activities of big banks, according to new research from Keefe Bruyette & Woods.

Obama’s proposal, also known as the “Volcker Plan” would limit the size of banks and the scope of their activities, particularly certain proprietary trading.

The KBW report that investors in the stocks of Morgan and Goldman are “overly discounting the prospective impact from any implementation” of the Volcker Plan.

The author of the KBW report was not available for comment, but the treatise said that the stock price discount was especially pronounced at Goldman Sachs, which was trading at about $151 in Wednesday morning’s session. KBW estimates that it should have a value of $189 if the Volcker Plan is passed. Morgan Stanley’s price discrepancy is much less severe. KBW predicted that it would be worth $28.56 after the Volcker Plan, and on Wednesday MS was trading at about $27.50.

The White House proposal would represent a major overhaul of the financial industry and has yet to be introduced as a bill in Congress.

Among the assumptions KBW made in the report were that the large-cap banks would be forced to divest pieces of their business to comply. KBW then tried to determine a potential sale value of those businesses and the resulting impact a sale would have on earnings, including the capital that could be redeployed.

Both Goldman and Morgan Stanley declined to comment on the report.

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