Morgan Stanley (NYSE:MS) stock closed over 5% lower on Thursday and continued to trade in the red in after-hours trading. This drop came after the Wall Street Journal reported that several regulatory bodies are probing the financial services giant ahead of its Q1 print. Notably, Morgan Stanley will release its first quarter 2024 financial results on Tuesday, April 16.
According to the report, the SEC, the Office of the Comptroller of the Currency (OCC), and other Treasury Department offices are conducting thorough investigations into the firm’s Wealth Management division. These probes, which are in addition to the U.S. Federal Reserve’s ongoing investigation, are focused on evaluating the firm’s measures to prevent potential money laundering activities. Specifically, the Fed is scrutinizing Morgan Stanley’s procedures for vetting international clients and verifying the origins of their wealth before onboarding them as customers.
Notably, the Wealth Management division is crucial for the bank, as it accounted for 48.5% of the financial services firm’s revenue in 2023. Consequently, any disruption to this division could adversely impact the bank’s financial performance and stock price. With this backdrop, let’s look at the Street’s Q1 estimates for Morgan Stanley.
Morgan Stanley: Q1 Expectations
Analysts expect Morgan Stanley to report revenue of $14.42 billion in Q1, compared to $14.5 billion in the prior-year quarter. Lower customer activity in the Investment Banking segment and changes in the deposit mix could restrict its top-line growth in Q1.
Meanwhile, analysts expect Morgan Stanley to post earnings of $1.67 per share, compared to $1.70 in the previous year’s quarter.
Is Morgan Stanley a Good Stock to Buy Now?
Wall Street analysts are cautiously optimistic about Morgan Stanley’s stock ahead of earnings. With eight Buy and eight Hold recommendations, MS stock sports a Moderate Buy consensus rating. Analysts’ average price target on MS stock is $98.60, implying 13.54% upside potential.
