A shift within Morgan Stanley has occurred, putting it on track for better growth and returns over the next year, CSLA bank analyst Mike Mayo says.
"Morgan Stanley is like the Boston Red Sox before they won the World Series," he said. "It's been a really long wait. They have not hit on all cylinders yet, but I think they're on the cusp of doing so."
On CNBC's " Fast Money ," Mayo said that he had attended Morgan Stanley's annual shareholder meeting in Purchase, N.Y., where he heard leadership vow to hit return on equity targets "sooner than people expected."
(Read More: Morgan Stanley Shareholders Give CEO Gorman a Pass )
"I can go back to annual meeting next year, the year after, and say, 'You said you'd have double-digit ROEs in 2014.' If it's not there, we can collectively hold their feet to their fire more," he added.
Noting that it had been 16 years since Morgan Stanley's merger with Dean Witter in a massive brokerage integration, Mayo also said that the banking behemoth has smoothed out perceptions of its business.
"What I'm saying is you're going to look back a year from now and say, 'You know that lost credibility? They've recouped a lot of that," he said. "They've cleaned up the balance sheet at Morgan Stanley. They sold off some bad assets.' And there's a lot of disgruntled people out there, used to work at Morgan Stanley; that's yesterday's news. They're past that stage."
Mayo said that the improvement within Morgan Stanley wasn't being reflected in its stock price.
"Morgan Stanley is going to narrow the gap vs. the better competitors," he said. "They're going from cleaning up to getting growth and higher returns, and that's what's missed."