President Donald Trump's and the GOP's formal legislative agenda may be stalled, but that is not stopping them from embarking on what may likely be the most massive deregulation effort the nation has ever seen.

Trump has said he wants to gut as much as 75 percent of all government regulations throughout his time in office.

While everyone keeps looking at the major legislative failures so far this year, Wall Street is concentrating on this deregulation sea change and making big bets on the winners. Morgan Stanley research has deemed the financial industry to be the biggest beneficiary of Republican deregulation attempts.

"With Congress facing a crowded calendar, calling into question the timing of and capacity for legislative execution on other policies that impact the market and economy (tax reform, infrastructure spending, etc.), we think it wise to examine the potential effects of actions within the president's authority," said a Morgan Stanley report out Thursday. "The Trump administration considers deregulation as a goal unto itself."

Along with outright deregulation, the firm says Trump has flexibility to reinterpret existing regulations without rolling them completely back, something that will help key industries which have a lot of rules.

Citing the Treasury Department's June plan to relax banking regulations, the team's analysts believe deregulation alone could increase financial companies' earnings by more than 15 percent.

"The recommendations from Treasury's recent report on bank regulations do not need congressional action," highlighted the Morgan Stanley report. "We expect that new agency heads nominated by the Trump administration will look to implement several suggestions from the Treasury report."

Financials had a rough first half of the year and are currently the fourth-worst performing sector in the . But financials have recently made a comeback and are up 6 percent in the past three months.

Morgan Stanley added that telecommunications companies are likely to benefit from deregulation efforts, both in the removal of so-called net neutrality and the Department of Justice's "considerable influence" over merger policy.

But like financials, telecommunications stocks have not been performing well. The sector is now down nearly 10 percent this year.

For that very reason, strategist Tom Lee of Fundstrat recommends buying these "pariah" stocks, predicting that the Trump administration's business-forward thinking is good news for the sector.