MS

Insights on Investing in MS – Expert Analyst Perspectives

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.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.

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