Morgan Stanley’s (MS) 4th Quarter Earnings Beat Expectations As Shares Climb


It appears that this morning is a good one for the banking sector, as Morgan Stanley (NYSE:MS) joins Bank of America in reporting 4th quarter earnings which have beaten most analyst expectations. Shares of Morgan Stanley (NYSE:MS) are trading up $0.94 or 3.62% in the pre-market after the company posted an adjusted quarterly profit of $0.43 per share. Analysts had been expecting profits for the quarter to come in much lower at just $0.32 per share.

Morgan Stanley (NYSE:MS) also revealed a sizable gain of 5.3% on their top line, thanks in part to a rise in equity trading revenue to $1.8 billion. At the same time, just like Bank of America, the company was able to reduce their expenses for the quarter significantly.

“A strong overall performance in the first half of the year was impacted by difficult market conditions in the second half that dampened trading activity,” explained Chief Executive Officer James Gorman. “In the fourth quarter, we took action to meaningfully restructure our fixed-income business on a capital and expense basis.”

The stock decreased 4.42% or $1.2 during the last trading session, hitting $25.95. Approximately 78,030 shares traded hands. MS shares have declined 34.44% since June 12, 2015 and are currently downtrending. It has underperformed the S&P500 by 25.57%.

From a total of 15 analysts covering Morgan Stanley (NYSE:MS) stock, 9 rate it a “Buy”, 1 a “Sell”, and 5 a “Hold”. This means that 60% of the ratings are positive. The highest target price is $82 while the lowest target price is $1. The mean of all analyst targets is $38 which is 46.44% above today’s ($25.95) stock price. Morgan Stanley was the topic of 29 analyst reports since July 21, 2015 according to the firm StockzIntelligence Inc. Societe Generale downgraded shares on January 13 to a “Sell” rating. JMP Securities upgraded shares to a”Outperform” rating and a $39 target share price in their report from an October 8. Macquarie Research maintained MS stock in a recent report from October 20 with a “Neutral” rating. Credit Suisse initiated the rating on September 15. Credit Suisse has a “Neutral” rating and a $82 price target on shares. Finally, RBC Capital Markets maintained the stock with a “Outperform” rating in a report they issued on an October 20.

The institutional sentiment increased to 1.21 in Q2 2015. It’s up 0.24, from 0.97 in 2015Q2. The ratio improved, as 75 funds sold all their Morgan Stanley shares they owned while 247 reduced their positions. 73 funds bought stakes while 317 increased their total positions. Institutions now own 1.46 billion shares which is 5.88% less than the previous share count of 1.55 billion in 2015Q2.

Mitsubishi Ufj Financial Group Inc holds 100% of its total portfolio in Morgan Stanley, equating to 432.02 million shares. Grisanti Capital Management Llc owns 584,350 shares representing 7.31% of their total US portfolio. Moreover, Wellcome Trust Ltd (The) As Trustee Of The Wellcome Trust has 5.16% of their total portfolio invested in the company, equating to 7.40 million shares. The Massachusetts-based Capital Growth Management Lp has a total of 4.74% of their portfolio invested in the stock. United American Securities Inc. (D B A Uas Asset Management), a New York-based fund reported 218,440 shares owned.

Morgan Stanley is a financial holding company. The company has a market cap of $50.28 billion. Through its subsidiaries and affiliates, the Company provides a variety of products and financial services to a group of clients and customers, including firms, governments, financial institutions and individuals. It has 16.13 P/E ratio. The Company’s operating divisions include Institutional Securities, Wealth Management and Investment Management.