How Investors May Respond To Morgan Stanley (MS) Delaying Fed Rate Cut Expectations to 2026

• Morgan Stanley has revised its US Federal Reserve rate cut forecast, now anticipating cuts to begin in 2026 following stronger-than-expected September labor market data.
• This shift reflects a reassessment of economic momentum, as Morgan Stanley interprets recent labor strength as evidence that fears of an economic slowdown earlier in the year were overstated.
• We'll explore how Morgan Stanley's outlook on delayed rate cuts may affect its earnings growth assumptions and market positioning.

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Morgan Stanley Investment Narrative Recap

To be a Morgan Stanley shareholder, you need confidence in the firm's ability to sustain earnings growth by capitalizing on global wealth trends and ongoing investments in its Wealth Management and technology platforms. The recent shift in Morgan Stanley's forecast for Federal Reserve rate cuts, now expecting them in 2026, has limited direct impact on its core short-term catalyst, which remains driven by asset flows and wealth management momentum, though prolonged high rates could introduce incremental risk to funding costs and client activity.

Among recent company announcements, the declaration of regular preferred dividends stands out. This signals ongoing financial stability and reinforces Morgan Stanley's position to continue rewarding shareholders, even as macroeconomic factors such as delayed rate cuts play out and shape near-term earnings expectations.

But importantly, investors should not overlook the risk that...

Read the full narrative on Morgan Stanley (it's free!)

Morgan Stanley's projections point to $76.0 billion in revenue and $17.2 billion in earnings by 2028. This outlook assumes a 5.0% annual revenue growth and an increase in earnings of $3.1 billion from the current $14.1 billion.

Uncover how Morgan Stanley's forecasts yield a $168.15 fair value, a 6% upside to its current price.

Exploring Other Perspectives

Six private investor fair value estimates for Morgan Stanley span from US$102.53 to US$168.15, underscoring a broad spectrum of market viewpoints in the Simply Wall St Community. While the consensus catalyst is sustained fee-based revenue growth from global wealth trends, these diverse perspectives make it clear there is room for a range of investor expectations on the company’s future performance.

Explore 6 other fair value estimates on Morgan Stanley - why the stock might be worth as much as 6% more than the current price!

Build Your Own Morgan Stanley Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Morgan Stanley research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Morgan Stanley research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Morgan Stanley's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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