Morgan Stanley (MS) AI Stock Analysis

• Market Cap: $255.59B
• Dividend Yield: 2.37%
• Average Volume (3M): 5.12M
• Price to Earnings (P/E): 18.1
• Beta (1Y): 1.45
• Revenue Growth: 6.36%
• EPS Growth: 45.50%
• Country: US
• Employees: 81,000
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Capital Markets
• EPS (TTM): 2.13
• Shares Outstanding: 1,596,335,800
• 10 Day Avg. Volume: 6,183,021
• 30 Day Avg. Volume: 5,122,733
• PEG Ratio: 0.28
• Price to Book (P/B): 1.91
• Price to Sales (P/S): 1.94
• P/FCF Ratio: -95.25
• Enterprise Value/Market Cap: 2.61
• Enterprise Value/Revenue: 6.16
• Enterprise Value/Gross Profit: 10.96
• Enterprise Value/Ebitda: 27.41
• 1Y Price Target: $153.55
• Price Target Upside: -4.72% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

• Rating: 76 Outperform
• Price Target: $164.00 ▲(1.76% Upside)

Morgan Stanley's strong financial performance, positive technical indicators, and favorable earnings call sentiment contribute to a robust stock score. While cash flow challenges and high leverage present risks, the company's strategic focus and market momentum support a positive outlook.

Positive Factors

Strong Wealth Management Profits

Morgan Stanley's Wealth Management segment shows robust profitability and high margins, indicating a strong competitive position and effective client engagement, which supports long-term revenue stability.

Record Client Assets

The growth in client assets reflects Morgan Stanley's successful asset management strategies and client trust, providing a solid foundation for future revenue and market share expansion.

Positive Investment Management Flows

Sustained positive inflows into investment management indicate strong product offerings and client confidence, which are crucial for continued growth and competitive advantage in asset management.

Negative Factors

High Leverage

Morgan Stanley's high leverage could pose risks by limiting financial flexibility and increasing vulnerability to economic downturns, necessitating careful management to maintain stability.

Cash Flow Challenges

Persistent cash flow challenges highlight difficulties in converting profits into cash, which could impact Morgan Stanley's ability to invest in growth opportunities and manage debt effectively.

Slowdown in Investment Banking

A slowdown in investment banking activities can affect Morgan Stanley's revenue diversification and growth potential, especially if market conditions remain volatile or uncertain.

Morgan Stanley Business Overview & Revenue Model

Company Description

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. 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 Money

Morgan Stanley generates revenue through several key streams. The Institutional Securities segment earns income from capital markets activities, such as underwriting and trading of equity and debt securities, as well as advisory fees from mergers and acquisitions. The Wealth Management segment generates revenue primarily through fees for advisory services, commissions from the sale of financial products, and interest income from client loans and deposits. The Investment Management segment derives income from management fees on assets under management and performance fees from specific investment products. Significant partnerships with institutional investors and strategic alliances in various markets also contribute to its earnings, along with a strong focus on diversification across sectors and geographies.

Morgan Stanley Financial Statement Overview

Summary

Morgan Stanley demonstrates strong profitability with a solid income statement, though cash flow challenges and high leverage require attention. The company shows efficient operations and steady revenue growth, but improvements in cash conversion are needed for long-term stability.

Income Statement

Morgan Stanley's income statement reveals a healthy financial performance with a Gross Profit Margin of 56.3% and a Net Profit Margin of 13.5% for TTM (Trailing-Twelve-Months), indicating strong profitability. The EBIT Margin and EBITDA Margin stand at 17.7% and 22.5% respectively, reflecting efficient operations. Revenue growth has been modest, with a TTM revenue increase of 2.5% from the previous year, suggesting steady business expansion. Overall, the company demonstrates solid profitability with room for revenue growth improvement.

Balance Sheet

The balance sheet shows a stable financial position with a Debt-to-Equity Ratio of 3.71, indicating a high leverage typical for the capital markets industry. The Return on Equity (ROE) is 13.4%, reflecting efficient use of shareholder funds. The Equity Ratio is 8.2%, suggesting a moderate level of equity financing. While the high leverage could present risks, the company's ability to generate profit mitigates some concerns.

Cash Flow

Cash flow analysis indicates challenges, with a negative Free Cash Flow of -$30.3 billion in TTM, reflecting substantial cash outflows. The Operating Cash Flow to Net Income Ratio is negative, implying issues in converting profits into cash. Despite negatives, the company has been managing financing activities effectively with positive cash flow from financing. Measures to improve cash generation are crucial for future stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	108.38B	103.14B	88.29B	62.48B	57.78B	45.83B
Gross Profit	60.98B	57.36B	50.13B	49.93B	56.41B	45.83B
EBITDA	24.38B	22.76B	16.07B	18.09B	23.88B	0.00
Net Income	14.76B	13.39B	9.09B	11.03B	15.03B	11.00B
Balance Sheet
Total Assets	1.35T	1.22T	1.19T	1.18T	1.19T	1.12T
Cash, Cash Equivalents and Short-Term Investments	216.00B	401.59B	461.89B	467.86B	500.35B	474.23B
Total Debt	436.99B	360.49B	339.04B	308.75B	305.36B	283.53B
Total Liabilities	1.24T	1.11T	1.09T	1.08T	1.08T	1.01T
Stockholders Equity	108.18B	104.51B	99.04B	100.14B	105.44B	101.78B
Cash Flow
Free Cash Flow	-20.94B	-2.10B	-36.95B	-9.47B	31.66B	-26.68B
Operating Cash Flow	-17.67B	1.36B	-33.54B	-6.40B	33.97B	-25.23B
Investing Cash Flow	-39.55B	-29.46B	-3.08B	-11.63B	-49.90B	-37.90B
Financing Cash Flow	73.02B	46.76B	-2.73B	22.71B	41.55B	83.78B

Morgan Stanley Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 161.16
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 161.16 is above the 20-day moving average (MA) of 156.13, above the 50-day MA of 149.12, and above the 200-day MA of 131.50, indicating a bullish trend. The MACD of 3.37 indicates Positive momentum. The RSI at 62.21 is Neutral, neither overbought nor oversold. The STOCH value of 51.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MS.

Morgan Stanley Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IBKR	78 Outperform	$30.63B	36.08	17.37%	0.73%	12.30%	20.76%
MS	76 Outperform	$255.59B	18.14	14.13%	2.37%	6.36%	45.50%
GS	76 Outperform	$242.94B	17.68	12.54%	1.62%	3.53%	45.85%
RJF	75 Outperform	$35.03B	17.24	17.40%	1.11%	9.42%	14.86%
SCHW	70 Outperform	$173.28B	25.70	12.28%	1.11%	4.64%	54.26%
LPLA	65 Neutral	$27.24B	23.29	22.03%	0.35%	29.23%	13.45%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%