Morgan Stanley’s Crypto Expansion: What the Digital Pivot Means for Its Valuation

Morgan Stanley is drawing attention after announcing it will expand cryptocurrency investment access for all its wealth management clients starting October 15. This move signals a major step toward mainstream adoption of digital assets within traditional banking.

See our latest analysis for Morgan Stanley.

Morgan Stanley’s decision to open up crypto investing to all clients comes as momentum builds around the stock, with a surge in M&A and trading activity adding to the buzz. The company’s total shareholder return has been remarkable, rising 42.3% in the past year and an impressive 123% over three years. This suggests investor confidence is on the upswing as earnings season approaches and major business segments stay resilient.

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With shares up strongly over the past year and analyst price targets now nearly matched, the critical question is whether Morgan Stanley remains undervalued or if the market has already priced in its next stage of growth.

Most Popular Narrative: Fairly Valued

With Morgan Stanley trading at $155.13 and the narrative’s fair value at $154.75, the market appears closely aligned with analyst expectations, which is a rare occurrence in a fast-moving sector.

*The ongoing increase in global wealth, combined with the accelerating intergenerational transfer of assets, is boosting demand for comprehensive advisory and wealth management solutions. This is evidenced by record net new assets and a growing client base, which should drive higher recurring fee-based revenue and long-term earnings growth.*

Read the complete narrative.

What financial engine powers this nearly perfect pricing? The narrative projects future expansion fueled by rising client demand and sharpened efficiency. These are numbers that could surprise even the closest followers. Curious about how profit margins, revenue forecasts, and market share ambitions shape this razor-thin valuation? Dive in to uncover which assumptions really move the fair value needle.

Result: Fair Value of $154.75 (ABOUT RIGHT)

Have a read of the narrative in full and understand what's behind the forecasts.

However, changes in investor behavior toward low-fee products and any unexpected regulatory shifts could quickly challenge Morgan Stanley's current outlook and growth prospects.

Find out about the key risks to this Morgan Stanley narrative.

Another View: Putting the Numbers to the Test

Looking at Morgan Stanley through the lens of our DCF model, we arrive at a fair value that is lower than today’s share price. This suggests the stock may be a bit overvalued based on projected cash flows. Does this mean the current optimism is ahead of itself, or is there more driving momentum than the numbers alone reveal?

Look into how the SWS DCF model arrives at its fair value.

Build Your Own Morgan Stanley Narrative

If you see things differently or want to understand the numbers for yourself, it takes just minutes to shape your own story and see where it leads. Do it your way

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.

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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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