Morgan Stanley (NYSE:MS) Earns "Outperform" Rating from Keefe, Bruyette & Woods

Key Points

• Keefe, Bruyette & Woods reaffirmed an “Outperform” rating on Morgan Stanley, while lowering its price target from $250 to $230—still implying 26.62% upside from the prior close.
• Morgan Stanley exceeded quarterly expectations, reporting $3.03 in EPS and $20.34 billion in revenue, with revenue up 11.6% year over year. However, the earnings strength was driven largely by equities trading, while fixed-income performance and investment-banking growth remained weaker.
• The company authorized a $20 billion share-repurchase program, allowing buybacks of up to 5.6% of outstanding shares; institutional investors and hedge funds own 84.19% of the stock, while the broader analyst consensus remains “Hold” with an average target of $215.90.

Morgan Stanley (NYSE:MS - Get Free Report)'s stock had its "outperform" rating reissued by equities research analysts at Keefe, Bruyette & Woods in a research note issued on Thursday, Benzinga reports. They presently have a $230.00 target price on the financial services provider's stock, down from their previous target price of $250.00. Keefe, Bruyette & Woods' price objective points to a potential upside of 26.62% from the stock's previous close.

Other research analysts also recently issued research reports about the stock. HSBC lifted their target price on shares of Morgan Stanley from $215.00 to $219.00 and gave the stock a "hold" rating in a report on Monday, September 28th. Weiss Ratings raised Morgan Stanley from a "buy (b-)" rating to a "buy (b)" rating in a research report on Wednesday, August 5th. JPMorgan Chase & Co. lifted their price objective on Morgan Stanley from $187.00 to $195.00 and gave the stock a "neutral" rating in a research note on Thursday, July 16th. Jefferies Financial Group upgraded Morgan Stanley from a "hold" rating to a "strong-buy" rating in a research note on Tuesday, July 7th. Finally, Royal Bank Of Canada reissued a "sector perform" rating and set a $195.00 price objective on shares of Morgan Stanley in a research report on Thursday. Two investment analysts have rated the stock with a Strong Buy rating, eleven have given a Buy rating, twelve have issued a Hold rating and two have given a Sell rating to the stock. According to data from MarketBeat.com, the stock currently has an average rating of "Hold" and an average target price of $215.90.

Morgan Stanley Stock Performance

Shares of NYSE MS opened at $181.65 on Thursday. The business's 50-day simple moving average is $205.75 and its 200-day simple moving average is $203.47. Morgan Stanley has a 52 week low of $152.80 and a 52 week high of $232.25. The company has a debt-to-equity ratio of 3.65, a quick ratio of 0.79 and a current ratio of 0.79. The firm has a market cap of $286.51 billion, a price-to-earnings ratio of 14.68, a P/E/G ratio of 1.24 and a beta of 1.22.

Morgan Stanley (NYSE:MS - Get Free Report) last announced its earnings results on Wednesday, October 14th. The financial services provider reported $3.03 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $2.93 by $0.10. Morgan Stanley had a return on equity of 19.31% and a net margin of 15.65%. The firm had revenue of $20.34 billion during the quarter, compared to analysts' expectations of $19.93 billion. During the same quarter in the prior year, the business earned $2.80 earnings per share. The company's revenue was up 11.6% on a year-over-year basis. As a group, equities research analysts expect that Morgan Stanley will post 12.66 earnings per share for the current fiscal year.

Morgan Stanley declared that its Board of Directors has initiated a stock repurchase plan on Wednesday, June 24th that permits the company to buy back $20.00 billion in shares. This buyback authorization permits the financial services provider to purchase up to 5.6% of its shares through open market purchases. Stock buyback plans are typically an indication that the company's management believes its stock is undervalued.

Hedge Funds Weigh In On Morgan Stanley

Several large investors have recently added to or reduced their stakes in the company. Financiere des Professionnels Fonds d investissement inc. acquired a new stake in Morgan Stanley during the 1st quarter worth $8,854,000. Diversify Wealth Management LLC lifted its holdings in Morgan Stanley by 201.0% during the first quarter. Diversify Wealth Management LLC now owns 17,559 shares of the financial services provider's stock worth $2,890,000 after acquiring an additional 11,726 shares in the last quarter. Mirae Asset Global Investments Co. Ltd. grew its stake in Morgan Stanley by 10.9% in the second quarter. Mirae Asset Global Investments Co. Ltd. now owns 294,047 shares of the financial services provider's stock valued at $61,468,000 after acquiring an additional 28,877 shares during the period. QRG Capital Management Inc. grew its stake in Morgan Stanley by 12.0% in the second quarter. QRG Capital Management Inc. now owns 279,622 shares of the financial services provider's stock valued at $58,452,000 after acquiring an additional 30,010 shares during the period. Finally, California Public Employees Retirement System grew its stake in Morgan Stanley by 13.4% in the first quarter. California Public Employees Retirement System now owns 2,422,284 shares of the financial services provider's stock valued at $398,635,000 after acquiring an additional 287,056 shares during the period. Institutional investors and hedge funds own 84.19% of the company's stock.

Morgan Stanley News Roundup

Here are the key news stories impacting Morgan Stanley this week:

• Positive Sentiment: Morgan Stanley reported adjusted earnings of $3.03 per share and revenue of $20.34 billion, exceeding analyst estimates of $2.93 and $19.93 billion, respectively. Revenue increased 11.6% year over year, while net income attributable to the firm rose to approximately $4.9 billion. Morgan Stanley Reports Third-Quarter Results
• Positive Sentiment: Equities trading revenue surged 41%, helping offset weaker fixed-income markets. Wealth Management also delivered record revenue of roughly $9.1 billion, added $232.4 billion in net new assets and reached approximately $10.5 trillion in client assets. IPO-related activity was a major contributor to new asset flows. Morgan Stanley Q3 Earnings Call Transcript
• Positive Sentiment: The board declared a quarterly dividend of $1.15 per share, equivalent to $4.60 annually and a yield of about 2.5%. Morgan Stanley also repurchased approximately $1.54 billion of common stock, while its standardized CET1 capital ratio stood at 14.9%. Morgan Stanley Declares Dividend
• Neutral Sentiment: The earnings beat was heavily dependent on equities trading, which may be difficult to repeat. Fixed-income trading revenue declined as Treasury yields rose and bond-market volatility reduced client activity. Wall Street Banks Trading Revenue Report
• Negative Sentiment: Investors appeared concerned that higher compensation costs, increased loan-loss provisions and relatively modest investment-banking growth made the quarter less durable beneath the headline numbers. Broader pressure on bank stocks from hotter inflation data and rising yields added to the caution.
• Negative Sentiment: Recent weakness has left MS well below its 52-week high and near its 50- and 200-day moving averages, increasing sensitivity to concerns about valuation and the cooling outlook for mergers and IPOs.

Morgan Stanley Company Profile

Morgan Stanley is a global financial services firm serving corporations, governments, financial institutions, individuals and other investors. The company provides investment banking and advisory services, including mergers and acquisitions advice, equity and debt underwriting, securities sales and trading, and corporate lending.

Through its Wealth Management business, Morgan Stanley offers financial planning, brokerage, investment advisory and banking services to individual investors, businesses and institutions.

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