Morgan Stanley (MS) AI Stock Analysis

• Market Cap: $225.05B
• Dividend Yield: 2.63%
• Average Volume (3M): 5.70M
• Price to Earnings (P/E): 16.0
• Beta (1Y): 1.45
• Revenue Growth: 6.31%
• EPS Growth: 45.50%
• Country: US
• Employees: 81,000
• Sector: Financial
• Sector Strength: 78
• Industry: Financial - Capital Markets
• EPS (TTM): 2.13
• Shares Outstanding: 1,598,000,000
• 10 Day Avg. Volume: 6,336,763
• 30 Day Avg. Volume: 5,701,226
• PEG Ratio: -0.42
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -7.40
• Enterprise Value/Market Cap: 1.00
• Enterprise Value/Revenue: 0.55
• Enterprise Value/Gross Profit: 3.77
• Enterprise Value/Ebitda: 2.65
• 1Y Price Target: $149.91
• Price Target Upside: 6.72% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 15

• Rating: 77 Outperform
• Price Target: $160.00 ▲(13.90%Upside)

Morgan Stanley demonstrates strong financial performance and technical momentum, highlighted by robust profitability and strategic growth in Wealth Management. While cash flow challenges exist, the firm's valuation remains reasonable, and the positive sentiment from the latest earnings call underscores investor confidence. Overall, Morgan Stanley is well-positioned, though attention to cash flow improvements could further enhance its financial standing.

Positive Factors

Financial Performance

Morgan Stanley's equity revenue performance is strong with a 23% year-over-year increase to $3.7 billion.

Shareholder Value

Strong shareholder returns fueled by solid capital position, leading to a progressive increase in dividend payout.

Wealth Management

Morgan Stanley has capitalized on the boom of global wealth during the last decade and doubled the profit contribution from wealth and investment management from 26% of total profit in 2010 to 62% in 2023.

Negative Factors

Capital Reserves

The company's CET1 decreased 30bps as a result of repurchasing $1.0bn of stock, reflecting a reduction in capital reserves.

Earnings

Morgan Stanley shares reacted negatively after reporting 2Q25 EPS of $2.13 vs. $1.96/$1.97 our/cons estimates.

Investment Banking

Investment Banking Division revenues decreased by 5% year-over-year, with lower Advisory and Debt Underwriting contributing to the decline.

Morgan Stanley Business Overview & Revenue Model

Company Description

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. It operates through Institutional Securities, Wealth Management, and Investment Management segments. The Institutional Securities segment offers capital raising and financial advisory services, including services related to the underwriting of debt, equity, and other securities, as well as advice on mergers and acquisitions, restructurings, real estate, and project finance. This segment also provides sales and trading services, such as sales, financing, prime brokerage, and market-making services in equity and fixed income products consisting of foreign exchange and commodities; corporate and commercial real estate loans, which provides secured lending facilities and financing for sales and trading customers, and asset-backed and mortgage lending; and wealth management services, investment, and research services. The Wealth Management segment offers financial advisor-led brokerage and investment advisory services; self-directed brokerage services; financial and wealth planning services; workplace services, including stock plan administration; annuity and insurance products; securities-based lending, residential real estate loans, and other lending products; banking; and retirement plan services to individual investors and small to medium-sized businesses and institutions. The Investment Management segment provides equity, fixed income, liquidity, and alternative/other products to benefit/defined contribution plans, foundations, endowments, government entities, sovereign wealth funds, insurance companies, and third-party fund sponsors and corporations through institutional and intermediary channels. Morgan Stanley was founded in 1924 and is headquartered in New York, New York.

How the Company Makes Money

Morgan Stanley makes money through its three primary business segments. The Institutional Securities segment generates revenue by providing financial advisory services, underwriting, and trading in equities and fixed income securities. This segment serves corporate clients, governments, and institutions. The Wealth Management segment earns income through fees and commissions from managing wealth and providing financial advisory services to individual investors and small- to medium-sized businesses. Lastly, the Investment Management segment generates revenue by managing assets on behalf of institutional and retail clients, earning management and performance fees. Key revenue streams for Morgan Stanley include advisory and underwriting fees, trading commissions, asset management fees, and net interest income. Partnerships with other financial institutions and strategic acquisitions also contribute to its earnings, enhancing its service offerings and expanding its market reach.

Morgan Stanley Financial Statement Overview

Summary

Morgan Stanley exhibits solid profitability with strong margins and efficient operations. The high Debt-to-Equity Ratio indicates typical industry leverage, yet the company's profitability somewhat mitigates this risk. Cash flow challenges are notable with negative free cash flow, highlighting a need for improved cash conversion. Overall, the company maintains a robust financial profile but faces areas for improvement in cash flow management.

Income Statement

Morgan Stanley's income statement reveals a healthy financial performance with a Gross Profit Margin of 56.3% and a Net Profit Margin of 13.5% for TTM (Trailing-Twelve-Months), indicating strong profitability. The EBIT Margin and EBITDA Margin stand at 17.7% and 22.5% respectively, reflecting efficient operations. Revenue growth has been modest, with a TTM revenue increase of 2.5% from the previous year, suggesting steady business expansion. Overall, the company demonstrates solid profitability with room for revenue growth improvement.

Balance Sheet

The balance sheet shows a stable financial position with a Debt-to-Equity Ratio of 3.71, indicating a high leverage typical for the capital markets industry. The Return on Equity (ROE) is 13.4%, reflecting efficient use of shareholder funds. The Equity Ratio is 8.2%, suggesting a moderate level of equity financing. While the high leverage could present risks, the company's ability to generate profit mitigates some concerns.

Cash Flow

Cash flow analysis indicates challenges, with a negative Free Cash Flow of -$30.3 billion in TTM, reflecting substantial cash outflows. The Operating Cash Flow to Net Income Ratio is negative, implying issues in converting profits into cash. Despite negatives, the company has been managing financing activities effectively with positive cash flow from financing. Measures to improve cash generation are crucial for future stability.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	103.14B	53.61B	62.48B	57.78B	49.68B
Gross Profit	57.36B	50.13B	49.93B	56.41B	45.07B
EBITDA	22.76B	16.07B	18.09B	23.88B	18.19B
Net Income	13.39B	9.09B	11.03B	15.03B	11.00B
Balance Sheet
Total Assets	1.22T	1.19T	1.18T	1.19T	1.12T
Cash, Cash Equivalents and Short-Term Investments	401.59B	461.89B	467.86B	500.35B	474.23B
Total Debt	360.49B	339.04B	308.75B	305.36B	283.53B
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

• Technical Analysis Sentiment: Positive
• Last Price: 140.47
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MS, the sentiment is Positive. The current price of 140.47 is below the 20-day moving average (MA) of 140.82, above the 50-day MA of 133.87, and above the 200-day MA of 124.93, indicating a neutral trend. The MACD of 2.40 indicates Positive momentum. The RSI at 57.00 is Neutral, neither overbought nor oversold. The STOCH value of 59.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MS.

Morgan Stanley Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IBKR	80 Outperform	$27.92B	33.55	19.15%	0.92%	12.25%	20.76%
LPLA	80 Outperform	$31.46B	27.22	40.36%	0.32%	26.32%	8.63%
SCHW	78 Outperform	$174.07B	25.79	15.59%	1.08%	4.64%	54.26%
MS	77 Outperform	$225.05B	15.96	14.13%	2.63%	6.31%	45.50%
RJF	77 Outperform	$32.41B	15.48	18.84%	1.22%	11.78%	25.68%
GS	71 Outperform	$217.32B	15.61	12.78%	1.70%	-0.34%	45.85%
Sector *	67 Neutral	¥722.67B	10.84	7.55%	3.37%	7.81%	14.63%

Morgan Stanley Corporate Events

Morgan Stanley Reports Record Revenues for 2024

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.