Morgan Stanley logged a 7.9% change during today's morning session, and is now trading at a price of $121.09 per share.
Morgan Stanley returned gains of 49.9% last year, with its stock price reaching a high of $121.45 and a low of $69.42. Over the same period, the stock outperformed the S&P 500 index by 15.1%. More recently, the company's 50-day average price was $101.59. 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. Based in New York, NY, the Large-Cap Finance company has 79,000 full time employees. Morgan Stanley has returned a 3.1% dividend yield over the last 12 months, but this may not be sustainable seen that the company has a choppy cash flow record.
EPS Trend Sustained Primarily by Reducing the Number of Shares Outstanding:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $13,892 | $17,098 | $10,162 | $9,411 | $21,595 | $50,281 |
| Interest Income (M) | $3,806 | $4,694 | $6,313 | $8,045 | $9,327 | $8,230 |
| Net Income (M) | $8,748 | $9,042 | $10,996 | $15,034 | $11,029 | $9,087 |
| Depreciation & Amort. (M) | $1,844 | $2,643 | $3,769 | $4,216 | $3,998 | $4,256 |
| Diluted Shares (M) | 1,738 | 1,640 | 1,624 | 1,814 | 1,713 | 1,646 |
| Earnings Per Share | $4.73 | $5.19 | $6.46 | $8.03 | $6.15 | $5.18 |
| EPS Growth | n/a | 9.73% | 24.47% | 24.3% | -23.41% | -15.77% |
| Avg. Price | $43.32 | $39.37 | $45.19 | $85.09 | $85.06 | $118.12 |
| P/E Ratio | 9.01 | 7.48 | 6.9 | 10.43 | 13.65 | 22.54 |
| Free Cash Flow (M) | $5,440 | $38,947 | -$26,675 | $31,663 | -$9,475 | -$36,948 |
| CAPEX (M) | $1,865 | $1,826 | $1,444 | $2,308 | $3,078 | $3,412 |
| EV / EBITDA | 17.98 | 18.15 | 9.9 | 10.63 | 14.22 | 23.02 |
| Total Debt (M) | $188,117 | $190,060 | $213,388 | $227,363 | $233,867 | $260,544 |
| Net Debt / EBITDA | 12.05 | 13.32 | 5.92 | 4.17 | 5.85 | 10.66 |
Morgan Stanley has EPS growth achieved by reducing the number of outstanding shares, positive cash flows, and a highly leveraged balance sheet. On the other hand, the company has rapidly growing revenues and increasing reinvestment in the business working in its favor.
an Increase in Expected Earnings Improves Its Value Outlook but Its Shares Are Expensive:
Morgan Stanley has a trailing twelve month P/E ratio of 16.7, compared to an average of 20.04 for the Finance sector. Based on its EPS guidance of $7.64, the company has a forward P/E ratio of 13.3. The 7.1% compound average growth rate of Morgan Stanley's historical and projected earnings per share yields a PEG ratio of 2.36. This suggests that these shares are overvalued. Furthermore, Morgan Stanley is likely overvalued compared to the book value of its equity, since its P/B ratio of 2.13 is higher than the sector average of 1.86. The company's shares are currently trading 44.6% below their Graham number.
Morgan Stanley Has an Analyst Consensus that Shares Are Overpriced:
The 17 analysts following Morgan Stanley have set target prices ranging from $73.6 to $121.0 per share, for an average of $105.94 with a hold rating. The company is trading 14.3% away from its average target price, indicating that there is an analyst belief that shares are overpriced.
Morgan Stanley has a very low short interest because 1.3% of the company's shares are sold short. Institutions own 61.6% of the company's shares, and the insider ownership rate stands at 23.57%, suggesting a large amount of insider shareholders. The largest shareholder is Mitsubishi UFJ Financial Group Inc, whose 23% stake in the company is worth $45,663,128,758.
