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Headquartered in New York City, Morgan Stanley (MS) is a financial services company renowned for its investment banking, wealth management, and institutional securities expertise. With a market cap of $155.77 billion, Morgan Stanley has established itself as a trusted advisor and partner to individuals, businesses, and governments worldwide.
Shares of MS have significantly underperformed the broader market over the past year. The stock has gained 7.3% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 18.5%. In 2024, MS stock is up 2.8%, while the SPX has gained 12.1% on a YTD basis.
Narrowing the focus, MS’ underperformance looks more pronounced when measured against the iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI). The exchange-traded fund has gained 23.1% over this period. Also, the stock's YTD gains are behind the exchange-traded fund's 10.1% returns over the same time frame.
Morgan Stanley released its Q2 earnings on Jul. 16, and the stock gained marginally on the reporting day. The company reported net revenues of $15.0 billion, an increase from $13.5 billion in the same quarter last year. Net income applicable to Morgan Stanley rose to $3.1 billion, or $1.82 per diluted share, compared to $2.2 billion, or $1.24 per diluted share in the year-ago quarter.
For the current fiscal year, ending in December, analysts expect MS’ EPS to grow 28.2% to $7 on a diluted basis. The company's earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 23 analysts covering MS stock, the consensus rating is a “Moderate Buy.” That’s based on eight “Strong Buy” ratings, 14 “Holds,” and one “Strong Sell.”
This configuration is less bullish than three months ago, with nine analysts suggesting a “Strong Buy.”
On Jul. 17, Jefferies analyst Daniel Fannon maintained a “Buy” rating on Morgan Stanley with a price target of $120, implying a potential upside of 9.7% from current levels.
The mean price target of $105.39 represents a 10% premium to MS’ current price levels. The Street-high price target of $121 suggests an upside potential of 26.2%.
On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
