MS Stock Overview
Morgan Stanley, a financial holding company, provides various financial products and services to corporations, governments, financial institutions, and individuals in the Americas, Europe, the Middle East, Africa, and Asia.
No risks detected for MS from our risk checks.
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Price History & Performance
|Historical stock prices|
|Current Share Price||US$91.73|
|52 Week High||US$109.73|
|52 Week Low||US$72.05|
|1 Month Change||12.35%|
|3 Month Change||15.57%|
|1 Year Change||-8.02%|
|3 Year Change||127.79%|
|5 Year Change||99.41%|
|Change since IPO||1,083.61%|
Recent News & Updates
Morgan Stanley: Strong Fundamentals Indicate 60% Upside
Morgan Stanley is one of the best financial institutions in the world, arguably in the top 3 together with JPM and GS. The bank has diversified strength on multiple verticals, including investment banking, global markets, asset management, and wealth management. In 2022 Morgan Stanley has also proven that the company can deliver a strong performance when there is no 'bull market'. I am bullish on MS stock as I believe the bank is undervalued as compared to fundamentals, including growth, profitability, and competitive strength. Based on a residual earnings valuation framework, I calculate a fair implied target price of $146.69/share (60% upside). Thesis Morgan Stanley (MS) is one of the best financial institutions in the world, with diversified strength on multiple verticals, including investment banking, global markets, asset management and wealth management. Moreover, the bank's stock is also trading relatively cheap. Accordingly, I am bullish on Morgan Stanley stock. Based on a residual earnings valuation framework, I calculate a fair implied target price of $146.69/share (60% upside). About Morgan Stanley Morgan Stanley is arguably one of the world’s top 3 global financial institution, along with Goldman Sachs (GS) and JPMorgan (JPM). The bank employs about 60,000 people worldwide and has reputable strength in investment banking, global markets (securities sales & trading), wealth management, and asset management. As of 2021, Morgan Stanley's international securities division, which also includes investment banking, accounted for about 50% of the company's total revenue exposure, wealth management accounted for about 40% and asset management for approximately 10%. From a geographical perspective, about 55% of total sales are generated in the Americas and about 23% in Asia and Europe. Morgan Stanley Investor Presentation Ever since CEO James Gorman has taken over the lead at the bank, Morgan Stanley has boosted its Wealth and Asset Management businesses. Most notably, from 2014 to 2021 Morgan Stanley's asset under management increased at 7-year CAGR of 21%, jumping from 400 billion to $1.6 trillion. Morgan Stanley Investor Presentation Respectively, client assets of the bank's Wealth Management arm increased at a 13.5% CAGR, from $2 trillion to $4.9 trillion. Morgan Stanley Investor Presentation Valuation Lags Fundamentals Morgan Stanley has a highly attractive financial profile. From 2014 to 2021 the banks revenues grew at a CAGR of more than 8%, from $40 billion to $59.8 billion. The company's operating income grew at double this speed (16% CAGR): from $8.5 billion in 2014 to $23.5 billion in 2021. Moreover, in 2022 Morgan Stanley has also proven that the company can deliver a strong performance when there is no 'bull market'. In Q2 2022, Morgan Stanley generated total revenues of $13.1 billion (more/less in line with 2021), EPS of $1.39 and ROTCE of 13.8%. I claim that Morgan Stanley's valuation doesn't match the bank's fundamentals. Morgan Stanley is currently trading at a one-year forward P/E of x13.6 and a P/B of about x1.5. Arguably for any other industry than financials, when a company can grow at a similar pace like Morgan Stanley, be similarly capable of gaining market share, and be similarly profitably, the company's stock would arguably trade at a x30 P/E. Seeking Alpha Residual Earnings Valuation In my opinion, banks are prime candidates to be valued with a residual earnings ("RE") valuation, given that the RE framework anchors on both the income statement and the balance sheet as well as accrual accounting. That said, I apply the following assumptions: To forecast EPS, I anchor on consensus analyst forecast as available on the Bloomberg Terminal 'till 2023. In my opinion, any estimate beyond 2023 is too speculative to include in a valuation framework - especially for banks.
Is Morgan Stanley Stock A Sell After Earnings? Consider Future Growth And Capital Return
Morgan Stanley's earnings per share decreased by -24% YoY in Q2 2022, and its second quarter EPS was -11% below the market's consensus estimate. Q2 results weren't as poor as what headline numbers indicate, as its wealth and investment management businesses' good performance helped to partially offset the weakness in the institutional securities segment. MS is rated as a Hold, taking into account its outlook for both earnings growth and shareholder capital return. Elevator Pitch I maintain my Hold investment rating for Morgan Stanley (MS). I previewed Morgan Stanley's Q1 2022 earnings in my previous article for MS written on April 12, 2022. In my latest update, I review the company's most recent Q2 2022 financial results. Morgan Stanley doesn't deserve a Sell rating, although its recent second-quarter earnings were below expectations. MS is more of a Hold, after considering the company's shareholder capital return initiatives and the stock's current valuations. What Were Morgan Stanley's Expected Earnings? Prior to Morgan Stanley's earnings announcement last week, the sell-side analysts had expected its non-GAAP adjusted EPS to decrease by -15% YoY from $1.89 in the second quarter of 2021 to $1.61 in Q2 2022. Did Morgan Stanley Beat Earnings? MS reported its financial results for the second quarter of this year on July 14, 2022 before the market opened. Morgan Stanley failed to deliver an earnings beat, as its actual Q2 2022 non-GAAP adjusted EPS was $1.44 which was -11% lower than the market's consensus bottom line forecast of $1.61 as highlighted in the preceding section. The Q2 2022 EPS of $1.44 was also equivalent to YoY and QoQ contractions of -24% and -30%, respectively. In the next section, I go into more detail about the key Q2 2022 financial metrics for Morgan Stanley. MS Stock Key Metrics A review of the key second-quarter metrics for MS indicates that its financial results were not as bad as what its earnings miss suggests. In other words, it was a mixed financial performance for Morgan Stanley in the recent quarter. On the negative side of things, the poor performance of Morgan Stanley's institutional securities business was the key reason for the company's below-expectations bottom line in Q2 2022. In my earlier April 12, 2022 article for MS, I warned that "the institutional securities business might be an even bigger concern as compared with its wealth and investment management business segments", and this has turned out to be true. Revenue for Morgan Stanley's institutional securities business segment decreased by -20% QoQ and -14% YoY to $6,119 million in the second quarter of this year. The institutional securities segment's pre-tax profit fell by -38% YoY and -44% QoQ to $1,554 million in the recent quarter. Morgan Stanley's institutional securities business did poorly in Q2 2022, due to the fact that "the backdrop was challenging for Investment Banking, particularly underwriting" as per MS management's comments at the July 14, 2022 Q2 2022 earnings call. On the positive side of things, Morgan Stanley's investment management and wealth management business segments performed reasonably well in Q2, despite a challenging market environment. On a QoQ basis, the wealth management business' income before tax declined by a modest -3% to $1,521 million in the second quarter of 2022. The investment management segment even saw its pre-tax income grow by +9% QoQ to $188 million in Q2 2022. Both the wealth management and investment management businesses have done way better than the institutional securities segment which witnessed a -44% QoQ drop in pre-tax profit over the same period. At the company's Q2 2022 investor call, Morgan Stanley credited the superior financial performance of its investment management segment to an "expanded product set", and highlighted "scale and rising rates" as the key factors contributing to the wealth management business' modest operating earnings decline. I touch on the post-Q2 earnings outlook for Morgan Stanley in the subsequent section. What To Expect After Earnings Morgan Stanley's earnings should continue to be depressed in the quarters ahead, but the company's shareholder capital return initiatives should provide support for its share price. As discussed in the preceding section, Morgan Stanley's investment and wealth management segments have been more resilient in the recent quarter as compared to its institutional securities business. But if the economy further weakens, it is inevitable that all of Morgan Stanley's businesses will eventually underperform, considering expectations of a slower pace of equity fundraising and a decline in management fees. Looking ahead, MS is only expected to better its prior Q1 2022 EPS of $2.06 in the first quarter of 2024 based on the Wall Street analysts' consensus financial projections. On the flip side, Morgan Stanley revealed in its Q2 2022 financial results press release that it is hiking its quarterly dividend payout by +11% from $0.700 per share previously to $0.775 per share going forward. This translates into a decent annualized forward dividend yield of 3.9% based on Morgan Stanley's last stock price of $78.86 as of July 18, 2022. At the same time, MS also disclosed a new share buyback authorization amounting to $20 billion, which is equivalent to almost 15% of its market capitalization. Notably, there is no expiry date associated with this $20 billion share repurchase authorization, which is positive in my opinion. This is because Morgan Stanley has no pressure to complete the share repurchases within any specific period of time, and that allows MS to be opportunistic in buying back its own shares only when the stock is perceived to be undervalued.
Morgan Stanley's (NYSE:MS) Shareholders Will Receive A Bigger Dividend Than Last Year
Morgan Stanley ( NYSE:MS ) has announced that it will be increasing its dividend from last year's comparable payment on...
|MS||US Capital Markets||US Market|
Return vs Industry: MS exceeded the US Capital Markets industry which returned -11.5% over the past year.
Return vs Market: MS matched the US Market which returned -9% over the past year.
|MS Average Weekly Movement||4.1%|
|Capital Markets Industry Average Movement||0.5%|
|Market Average Movement||7.6%|
|10% most volatile stocks in US Market||17.1%|
|10% least volatile stocks in US Market||3.1%|
Stable Share Price: MS is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.
Volatility Over Time: MS's weekly volatility (4%) has been stable over the past year.
About the Company
Morgan Stanley, a financial holding company, provides various financial products and services to corporations, governments, financial institutions, and individuals in the Americas, Europe, the Middle East, Africa, and Asia. It operates through Institutional Securities, Wealth Management, and Investment Management segments. The Institutional Securities segment offers capital raising and financial advisory services, including services related to the underwriting of debt, equity, and other securities, as well as advice on mergers and acquisitions, restructurings, real estate, and project finance.
Morgan Stanley Fundamentals Summary
|MS fundamental statistics|
Is MS overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|MS income statement (TTM)|
|Cost of Revenue||US$6.70b|
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
Oct 14, 2022
|Earnings per share (EPS)||7.64|
|Net Profit Margin||22.99%|
How did MS perform over the long term?See historical performance and comparison