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Morgan Stanley (MS)
NYSE:MS
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Morgan Stanley
(NYSE:MS)
67Neutral
Positive Factors
Financial Performance
Revenue rose 26% driven by higher asset levels in wealth management and increased client activity in trading.
Market Position
Morgan Stanley has doubled its profit contribution from wealth and investment management to 62%, highlighting its strong position in the market.
Shareholder Returns
Strong shareholder returns are supported by a progressive increase in dividend payout and sizeable share repurchases.
Negative Factors
Efficiency
MS delivered a core efficiency ratio 610bps worse than Street expectations.
Investment Banking
Investment banking activity is impacted by recent uncertainty in the markets.
Net New Assets
MS delivered worse net new assets than the Street, although fee-based flows were better.
Morgan Stanley (MS) vs. S&P 500 (SPY)
Market Cap
$174.08B
Dividend Yield3.63%
Average Volume (3M)8.25M
Price to Earnings (P/E)13.6
Beta (1Y)1.44
Revenue Growth7.16%
EPS Growth53.77%
CountryUS
Employees80,000
SectorFinancial
Sector Strength78
IndustryFinancial - Capital Markets
Share Statistics
EPS (TTM)7.95
Shares Outstanding1,612,855,600
10 Day Avg. Volume8,003,617
30 Day Avg. Volume8,246,014
Financial Highlights & Ratios
PEG Ratio0.25
Price to Book (P/B)N/A
Price to Sales (P/S)3.14
Price to Cash Flow (P/CF)4.10
P/FCF Ratio1.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$139.33Price Target Upside39.57% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
Morgan Stanley Business Overview & Revenue Model
Company DescriptionMorgan Stanley is a leading global financial services firm that provides a wide range of services in the areas of investment banking, securities, wealth management, and investment management. The company operates in three main business segments: Institutional Securities, Wealth Management, and Investment Management. Through its Institutional Securities division, Morgan Stanley offers investment banking, sales and trading, and other financial services to corporations, governments, financial institutions, and individuals. Its Wealth Management division provides comprehensive financial planning and investment advisory services to individuals and small- to medium-sized businesses. The Investment Management division offers a broad array of investment strategies and products to a diverse client base.
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
Negative
99.83
Price Trends
126.96
Negative
127.86
Negative
115.30
Negative
Market Momentum
-2.62
Negative
39.63
Neutral
20.94
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MS, the sentiment is Negative. The current price of 99.83 is below the 20-day moving average (MA) of 116.34, below the 50-day MA of 126.96, and below the 200-day MA of 115.30, indicating a bearish trend. The MACD of -2.62 indicates Negative momentum. The RSI at 39.63 is Neutral, neither overbought nor oversold. The STOCH value of 20.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $158.89B | 12.61 | 11.95% | 2.50% | 14.80% | 77.97% | |
75 Outperform | $25.01B | 22.28 | 42.26% | 0.42% | 23.20% | 2.38% | |
74 Outperform | $67.39B | 23.02 | 19.20% | 0.68% | 19.54% | 22.23% | |
72 Outperform | $139.59B | 25.07 | 13.30% | 1.48% | 1.87% | 17.63% | |
69 Neutral | $26.70B | 12.72 | 19.07% | 1.42% | 13.79% | 28.57% | |
67 Neutral | $174.08B | 13.58 | 13.16% | 3.63% | 7.16% | 53.77% | |
63 Neutral | $12.86B | 9.17 | 9.14% | 4.78% | 16.41% | -10.11% |
* Financial Sector Average
Performance Comparison
MS
Morgan Stanley
99.83
9.62
10.66%
IBKR
Interactive Brokers
146.08
32.45
28.56%
LPLA
LPL Financial
283.31
23.20
8.92%
RJF
Raymond James Financial
123.65
-4.51
-3.52%
SCHW
Charles Schwab
69.06
-2.30
-3.22%
GS
Goldman Sachs Group
470.81
69.13
17.21%
Morgan Stanley Earnings Call Summary
Earnings Call Date: Jan 16, 2025 | % Change Since: -23.02% | Next Earnings Date: Apr 11, 2025
Earnings Call Sentiment Positive
Morgan Stanley demonstrated strong financial performance with record earnings and revenues, driven by robust growth in Institutional Securities and Wealth Management. The firm showed resilience and strategic focus, expanding its fee-based flows and achieving significant growth in its Investment Management AUM. However, there were challenges related to real estate charges, loan growth, and compliance investments. The overall sentiment of the call is positive, with optimism about future growth opportunities despite some challenges.Highlights
Record Earnings and Revenue Growth
Morgan Stanley reported fourth quarter revenues of $16.2 billion and full-year revenues of $61.8 billion. The fourth quarter earnings per share reached $2.22, the highest in over 15 years, contributing to a full-year EPS of $7.95.
Strong Performance in Institutional Securities
Institutional Securities delivered annual revenues of $28.1 billion, with growth across regions and products. The segment achieved its highest reported equity revenues and combined equity and fixed income markets results.
Wealth Management Growth
Wealth Management reported record revenues of $28.4 billion for the year, with pretax profit of $7.7 billion. The segment saw net new assets of $252 billion, representing approximately 5% annual growth.
Investment Management Achievements
The Investment Management business reported annual revenues of $5.9 billion and reached a new AUM peak of $1.7 trillion, supported by market gains and net inflows.
Expansion of Fee-Based Flows
Fee-based flows in Wealth Management reached an exceptional $123 billion in 2024, indicating strong momentum and client engagement.
Lowlights
Real Estate Charges Impact
In 2024, Morgan Stanley took real estate charges of $62 million, impacting full-year EPS by $0.03.
Challenges in Loan Growth
There were challenges in loan growth earlier in the year due to the interest rate environment, with a decline in the pace of pay downs affecting the securities-based lending product.
Regulatory Compliance Investments
Investments in systems for AML and BSA compliance on the Wealth Management side were necessary to meet higher regulatory standards, indicating ongoing challenges in this area.
Company Guidance
During Morgan Stanley's Q4 2024 earnings call, significant guidance was provided regarding the firm's strategic direction and financial performance. Ted Pick, Chairman and CEO, highlighted the firm's robust revenue across the four quarters of 2024, with figures of $15.1 billion, $15.0 billion, $15.4 billion, and $16.2 billion, leading to a record earnings per share (EPS) of $2.22 in Q4, the highest in over 15 years. For the full year, the firm achieved a return on tangible equity (ROTCE) of 19% and an EPS of $7.95, showcasing its resilience amidst macroeconomic uncertainties. The strategic update introduced Morgan Stanley's "four pillars"—strategy, culture, financial strength, and growth—emphasizing a focus on serving clients, maintaining strong capital and liquidity, and making strategic investments. Additionally, the firm reported that Wealth and Investment Management combined revenues grew to $34 billion, with total client assets nearing $7.9 trillion. The investment management division reached a peak AUM of $1.7 trillion, bolstered by significant inflows and market gains.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.