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Morgan Stanley (MS)
:MS
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Morgan Stanley
(NYSE:MS)
71Outperform
Positive Factors
Earnings
Revenue rose 26% to USD16.2bn, driven by higher asset levels in wealth management and increased client activity in trading.
Financial Performance
Morgan Stanley demonstrated strong operating leverage and capital efficiency, achieving a 23% ROTCE, the highest since 2008.
Shareholder Returns
Strong shareholder returns fueled by solid capital position, leading to a progressive increase in dividend payout.
Negative Factors
Asset Values
Client assets fell 3% likely due to lower asset values, indicating potential challenges in wealth management.
Investment Banking
Investment banking activity is expected to stay tempered, with recent uncertainty posing a challenge to seeing pipelines come to fruition.
Market Conditions
Global economic slowdown, prolonged high market interest rates, noticeable contraction in market liquidity, and a substantial correction in global asset valuation.
Morgan Stanley (MS) vs. S&P 500 (SPY)
Market Cap
$210.23B
Dividend Yield2.82%
Average Volume (3M)8.15M
Price to Earnings (P/E)15.4
Beta (1Y)1.41
Revenue Growth6.53%
EPS Growth55.54%
CountryUS
Employees81,000
SectorFinancial
Sector Strength85
IndustryFinancial - Capital Markets
Share Statistics
EPS (TTM)2.60
Shares Outstanding1,604,319,200
10 Day Avg. Volume6,381,103
30 Day Avg. Volume8,145,163
Financial Highlights & Ratios
PEG Ratio0.76
Price to Book (P/B)1.85
Price to Sales (P/S)0.00
P/FCF Ratio-88.58
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$133.25Price Target Upside0.56% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
Morgan Stanley Business Overview & Revenue Model
Company DescriptionMorgan 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. This segment also provides sales and trading services, such as sales, financing, prime brokerage, and market-making services in equity and fixed income products consisting of foreign exchange and commodities; corporate and commercial real estate loans, which provides secured lending facilities and financing for sales and trading customers, and asset-backed and mortgage lending; and wealth management services, investment, and research services. The Wealth Management segment offers financial advisor-led brokerage and investment advisory services; self-directed brokerage services; financial and wealth planning services; workplace services, including stock plan administration; annuity and insurance products; securities-based lending, residential real estate loans, and other lending products; banking; and retirement plan services to individual investors and small to medium-sized businesses and institutions. The Investment Management segment provides equity, fixed income, liquidity, and alternative/other products to benefit/defined contribution plans, foundations, endowments, government entities, sovereign wealth funds, insurance companies, and third-party fund sponsors and corporations through institutional and intermediary channels. Morgan Stanley was founded in 1924 and is headquartered in New York, New York.
How the Company Makes MoneyMorgan Stanley generates revenue primarily through its three main business segments: Institutional Securities, Wealth Management, and Investment Management. The Institutional Securities segment earns money from activities such as advising clients on mergers and acquisitions, underwriting securities, and facilitating trading in fixed income, equity, and other financial products. The Wealth Management segment generates revenue through advisory fees, commissions, and interest income from lending and cash management services. The Investment Management division earns fees based on assets under management and performance fees. Additionally, Morgan Stanley's earnings are supported by its strategic partnerships and alliances, as well as its global presence, which allows it to leverage scale and expertise across different markets.
Morgan Stanley Financial Statement Overview
Summary
Morgan Stanley exhibits strong revenue growth and operational efficiency with an EBIT margin of 48.04%. However, the balance sheet shows increasing liabilities, and cash flow volatility indicates liquidity management challenges.Income Statement
Morgan Stanley has demonstrated a solid performance in revenue growth and profitability. The company achieved a revenue growth rate of approximately 14.70% from 2023 to 2024. The EBIT margin stands at 48.04% for 2024, indicating strong operational efficiency. However, the lack of reported EBITDA in 2024 limits a full margin analysis.85
Very Positive
Balance Sheet
The balance sheet reveals a stable equity position with a Debt-to-Equity ratio of 2.64 in 2023. The company's equity increased, indicating a strong financial foundation. However, the equity ratio has decreased to 8.29% in 2023 due to increasing liabilities, suggesting potential leverage risk.75
Positive
Cash Flow
The cash flow statement indicates volatility with negative free cash flow in recent years. Free cash flow to net income ratio has been negative, reflecting challenges in converting earnings into free cash. The operating cash flow to net income ratio was negative in 2023, highlighting cash flow pressures.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 61.50B | 53.61B | 53.39B | 59.75B | 48.00B | Gross Profit |
| 61.50B | 53.61B | 0.00 | 0.00 | 0.00 | EBIT |
| 29.55B | 23.55B | 24.63B | 29.82B | 23.09B | EBITDA |
| 17.60B | 23.55B | 24.63B | 29.82B | 23.09B | Net Income Common Stockholders |
| 13.39B | 9.09B | 11.03B | 15.03B | 11.00B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 401.59B | 461.89B | 467.86B | 500.35B | 474.23B | Total Assets |
| 1.22T | 1.19T | 1.18T | 1.19T | 1.12T | Total Debt |
| 360.49B | 339.04B | 308.75B | 305.36B | 283.53B | Net Debt |
| 284.75B | 280.38B | 216.00B | 218.52B | 216.08B | Total Liabilities |
| 1.11T | 1.09T | 1.08T | 1.08T | 1.01T | Stockholders Equity |
| 104.51B | 99.04B | 100.14B | 105.44B | 101.78B |
| Cash Flow | Free Cash Flow | |||
| -2.10B | -36.95B | -9.47B | 31.66B | -26.68B | Operating Cash Flow |
| 1.36B | -33.54B | -6.40B | 33.97B | -25.23B | Investing Cash Flow |
| -29.46B | -3.08B | -11.63B | -49.90B | -37.90B | Financing Cash Flow |
| 46.76B | -2.73B | 22.71B | 41.55B | 83.78B |
Morgan Stanley Technical Analysis
Positive
132.51
Price Trends
115.22
Positive
122.95
Positive
116.73
Positive
Market Momentum
4.34
Negative
73.83
Negative
96.04
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MS, the sentiment is Positive. The current price of 132.51 is above the 20-day moving average (MA) of 118.38, above the 50-day MA of 115.22, and above the 200-day MA of 116.73, indicating a bullish trend. The MACD of 4.34 indicates Negative momentum. The RSI at 73.83 is Negative, neither overbought nor oversold. The STOCH value of 96.04 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MS.
Morgan Stanley Risk Analysis
Morgan Stanley disclosed 73 risk factors in its most recent earnings report. Morgan Stanley reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Morgan Stanley Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $30.79B | 26.65 | 40.36% | 0.31% | 26.32% | 8.63% | |
77 Outperform | $156.66B | 26.21 | 14.12% | 1.17% | 2.32% | 37.66% | |
73 Outperform | $85.70B | 27.99 | 19.26% | 0.49% | 14.67% | 23.59% | |
73 Outperform | $30.71B | 14.66 | 18.84% | 1.25% | 11.79% | 25.74% | |
71 Outperform | $210.23B | 15.38 | 13.88% | 2.82% | 6.53% | 55.54% | |
66 Neutral | $187.66B | 14.19 | 12.26% | 1.92% | 7.70% | 68.64% | |
64 Neutral | $12.74B | 9.83 | 7.63% | 17000.35% | 12.34% | -5.32% |
* Financial Sector Average
Performance Comparison
MS
Morgan Stanley
132.51
36.01
37.32%
IBKR
Interactive Brokers
206.99
85.96
71.02%
LPLA
LPL Financial
381.42
115.10
43.22%
RJF
Raymond James Financial
152.95
29.12
23.52%
SCHW
Charles Schwab
88.11
11.15
14.49%
GS
Goldman Sachs Group
615.90
161.41
35.51%
Morgan Stanley Earnings Call Summary
Earnings Call Date:Apr 11, 2025
(Q1-2025)
| % Change Since: 25.33%|
Next Earnings Date:Jul 16, 2025
Earnings Call Sentiment Positive
The earnings call highlighted Morgan Stanley's strong financial performance, with record revenues, EPS, and significant growth in wealth management and institutional securities. However, ongoing market uncertainties and geopolitical risks present challenges, particularly affecting strategic client activities and the potential slowdown in IPO and M&A activities.Q1-2025 Updates
Positive Updates
Record Revenues and Strong EPS
Morgan Stanley reported record revenues of $17.7 billion and an EPS of $2.60, demonstrating the firm's strong performance despite market uncertainties.
Wealth Management Success
Wealth management added $94 billion of net new assets, with consistently strong fee-based flows of $30 billion, reflecting client engagement and demand for advice.
Robust Institutional Securities Performance
Institutional securities delivered a record quarter with revenues of $9 billion, up 28% from the prior year, driven by strong performance in equities and geographic reach, particularly in Asia.
Equities Trading Record
Equity revenues increased 45% from the prior year to a record $4.1 billion, with strong client activity and engagement across regions.
Fixed Income Success
Fixed income underwriting delivered strong revenues of $677 million, driven by non-investment grade loan issuance and strong investor demand.
Strong Global Presence
Morgan Stanley's global footprint, particularly in Asia, contributed significantly to its strong performance, with institutional securities revenues in Asia up 35% year over year.
Negative Updates
Market Uncertainty and Volatility
The firm faces ongoing market uncertainties, including potential recession risks and unpredictable trade policies, affecting client strategic activities.
Severance Charges Impact
The firm incurred $144 million in severance charges related to performance management and business alignment, impacting the efficiency ratio.
Challenges in Fixed Income
Fixed income trading faced fewer opportunities, with tighter credit spreads limiting secondary market opportunities compared to the previous period.
Potential Slowdown in IPO and M&A Activity
While the banking pipeline remains unchanged, ongoing market volatility and geopolitical uncertainties could delay IPO and M&A activities.
Company Guidance
During Morgan Stanley's First Quarter 2025 Earnings Call, CEO Ted Pick highlighted the firm's robust financial performance, reporting $7.7 billion in revenue, an EPS of $2.60, and a 23% return on tangible equity. The firm successfully added $94 billion in net new assets, raising the total to $7.7 trillion. In equities, Morgan Stanley achieved a record $4.1 billion in revenue, marking a 45% increase from the previous year, while institutional securities delivered a record $9 billion in revenue, up 28% year-over-year. The CET1 ratio stood at 15.3%, providing a solid capital position. Despite market volatility, Morgan Stanley maintained strong client engagement across segments, with wealth management generating $7.3 billion in revenue and $30 billion in fee-based flows. Asset management revenues increased by 15% to $4.4 billion, with total AUM reaching $1.6 trillion. The call emphasized Morgan Stanley's ability to navigate uncertain economic conditions and its commitment to capital management and client service.Morgan Stanley Corporate Events
Business Operations and StrategyFinancial Disclosures
Morgan Stanley Reports Record Revenues for 2024
Positive
Jan 16, 2025
On January 16, 2025, Morgan Stanley announced its financial results for Q4 and the full year of 2024, reporting significant increases in net revenues and income compared to the previous year. The firm achieved record net revenues of $61.8 billion and a 20.2% ROTCE in Q4, with strong performances across Institutional Securities, Wealth Management, and Investment Management, highlighting its strategic execution and market resilience.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.