Morgan Stanley (MS) AI Stock Analysis

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Morgan Stanley

(NYSE:MS)

Rating:71Outperform

Price Target:―

Morgan Stanley's strong revenue growth and operational efficiency underpin a solid financial foundation, despite cash flow volatility and leverage concerns. Technical indicators suggest cautious optimism, while valuation remains fair with a reasonable P/E ratio and attractive dividend yield. The recent earnings call reflects robust performance, although market uncertainties pose risks.

Positive Factors

Financial Performance

Revenue rose 26% y/y to USD16.2bn, while diluted EPS more than doubled to USD2.22, beating expectations by 8%/32% respectively.

Trading Success

Morgan Stanley reported strong trading results, with equities trading up 45% year-over-year and total capital markets revenue up 22%.

Wealth Management Growth

Morgan Stanley's Wealth Management segment showed resilience with securities-based lending and residential real estate balances increasing.

Negative Factors

Asset Value Challenges

Client assets fell 3% likely due to lower asset values, indicating potential challenges in wealth management.

Global Economic Concerns

Global economic slowdown, prolonged high market interest rates, noticeable contraction in market liquidity, and a substantial correction in global asset valuation.

Investment Banking Challenges

Investment banking activity is impacted by recent uncertainty in the markets.

Morgan Stanley (MS) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$211.48B

Dividend Yield2.81%

Average Volume (3M)5.44M

Price to Earnings (P/E)15.5

Beta (1Y)1.44

Revenue Growth6.53%

EPS Growth55.54%

CountryUS

Employees81,000

SectorFinancial

Sector Strength77

IndustryFinancial - Capital Markets

Share Statistics

EPS (TTM)2.60

Shares Outstanding1,604,319,200

10 Day Avg. Volume4,555,616

30 Day Avg. Volume5,440,060

Financial Highlights & Ratios

PEG Ratio-0.55

Price to Book (P/B)1.44

Price to Sales (P/S)0.00

P/FCF Ratio-15.17

Enterprise Value/Market Cap1.14

Enterprise Value/Revenue0.60

Enterprise Value/Gross Profit4.19

Enterprise Value/Ebitda3.10

Forecast

1Y Price Target

$133.09

Price Target Upside0.89% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering14

Morgan Stanley Business Overview & Revenue Model

Company DescriptionMorgan Stanley (MS) is a leading global financial services firm offering investment banking, securities, wealth management, and investment management services. The firm operates through three main business segments: Institutional Securities, Wealth Management, and Investment Management. Morgan Stanley serves a diverse group of clients, including corporations, governments, financial institutions, and individuals, providing them with innovative financial solutions across the globe.

How the Company Makes MoneyMorgan 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 Key Performance Indicators (KPIs)

Any

Total Client Assets

Total Client Assets
Indicates the total value of assets held by clients, reflecting the firm's ability to attract and retain wealth.

Chart InsightsMorgan Stanley's Total Client Assets have shown a consistent upward trajectory, reaching $6.015 trillion by Q1 2025. This growth aligns with the firm's successful addition of $94 billion in net new assets, as highlighted in their earnings call. Despite market volatility, Morgan Stanley's robust performance in wealth management and institutional securities, particularly in equities, has driven asset growth. However, potential challenges such as geopolitical risks and a slowdown in IPO and M&A activities could impact future asset accumulation.

Data provided by:

Main Street Data

Morgan Stanley Earnings Call Summary

Earnings Call Date:Apr 11, 2025

(Q1-2025)

% Change Since: 24.77%|

Next Earnings Date:Jul 16, 2025

Earnings Call Sentiment Positive

The earnings call highlighted Morgan Stanley's strong financial performance, with record revenues, EPS, and significant growth in wealth management and institutional securities. However, ongoing market uncertainties and geopolitical risks present challenges, particularly affecting strategic client activities and the potential slowdown in IPO and M&A activities.

Q1-2025 Updates

Positive Updates

Record Revenues and Strong EPS

Morgan Stanley reported record revenues of $17.7 billion and an EPS of $2.60, demonstrating the firm's strong performance despite market uncertainties.

Wealth Management Success

Wealth management added $94 billion of net new assets, with consistently strong fee-based flows of $30 billion, reflecting client engagement and demand for advice.

Robust Institutional Securities Performance

Institutional securities delivered a record quarter with revenues of $9 billion, up 28% from the prior year, driven by strong performance in equities and geographic reach, particularly in Asia.

Equities Trading Record

Equity revenues increased 45% from the prior year to a record $4.1 billion, with strong client activity and engagement across regions.

Fixed Income Success

Fixed income underwriting delivered strong revenues of $677 million, driven by non-investment grade loan issuance and strong investor demand.

Strong Global Presence

Morgan Stanley's global footprint, particularly in Asia, contributed significantly to its strong performance, with institutional securities revenues in Asia up 35% year over year.

Negative Updates

Market Uncertainty and Volatility

The firm faces ongoing market uncertainties, including potential recession risks and unpredictable trade policies, affecting client strategic activities.

Severance Charges Impact

The firm incurred $144 million in severance charges related to performance management and business alignment, impacting the efficiency ratio.

Challenges in Fixed Income

Fixed income trading faced fewer opportunities, with tighter credit spreads limiting secondary market opportunities compared to the previous period.

Potential Slowdown in IPO and M&A Activity

While the banking pipeline remains unchanged, ongoing market volatility and geopolitical uncertainties could delay IPO and M&A activities.

Company Guidance

During Morgan Stanley's First Quarter 2025 Earnings Call, CEO Ted Pick highlighted the firm's robust financial performance, reporting $7.7 billion in revenue, an EPS of $2.60, and a 23% return on tangible equity. The firm successfully added $94 billion in net new assets, raising the total to $7.7 trillion. In equities, Morgan Stanley achieved a record $4.1 billion in revenue, marking a 45% increase from the previous year, while institutional securities delivered a record $9 billion in revenue, up 28% year-over-year. The CET1 ratio stood at 15.3%, providing a solid capital position. Despite market volatility, Morgan Stanley maintained strong client engagement across segments, with wealth management generating $7.3 billion in revenue and $30 billion in fee-based flows. Asset management revenues increased by 15% to $4.4 billion, with total AUM reaching $1.6 trillion. The call emphasized Morgan Stanley's ability to navigate uncertain economic conditions and its commitment to capital management and client service.

Morgan Stanley Financial Statement Overview

Summary

Morgan Stanley demonstrates strong revenue growth and operational efficiency with an EBIT margin of 48.04%. The balance sheet is stable with a solid equity base, but rising liabilities pose a leverage risk. Cash flow volatility indicates potential liquidity management challenges, but overall financial performance remains robust.

Income Statement

Very Positive

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.

Balance Sheet

Positive

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.

Cash Flow

Neutral

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.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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
	EBIT
17.60B	11.81B	24.76B	19.67B	14.42B
	EBITDA
22.76B	16.07B	18.09B	23.88B	18.19B
	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

Technical Analysis Sentiment

Positive

Last Price131.92

Price Trends

50DMA

119.96

Positive

100DMA

123.76

Positive

200DMA

119.88

Positive

Market Momentum

MACD

2.76

Positive

RSI

65.59

Neutral

STOCH

76.17

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 131.92 is above the 20-day moving average (MA) of 129.52, above the 50-day MA of 119.96, and above the 200-day MA of 119.88, indicating a bullish trend. The MACD of 2.76 indicates Positive momentum. The RSI at 65.59 is Neutral, neither overbought nor oversold. The STOCH value of 76.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (65)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IBKR	81 Outperform	$86.65B	28.30	19.26%	0.63%	14.67%	23.59%
LPLA	80 Outperform	$30.33B	26.25	40.36%	0.32%	26.32%	8.63%
SCHW	78 Outperform	$160.62B	26.87	14.12%	1.22%	2.32%	37.66%
RJF	77 Outperform	$29.81B	14.23	18.84%	1.35%	11.78%	25.68%
GS	72 Outperform	$188.67B	14.27	12.26%	1.92%	7.70%	68.64%
MS	71 Outperform	$211.48B	15.47	13.88%	2.81%	6.53%	55.54%
Sector *	65 Neutral	$12.93B	9.81	7.84%	78.03%	12.20%	-7.74%

* Financial Sector Average

Performance Comparison

Morgan Stanley

131.92

39.38

42.55%

IBKR

Interactive Brokers

204.98

85.56

71.65%

LPLA

LPL Financial

379.39

103.38

37.46%

RJF

Raymond James Financial

148.61

34.57

30.31%

SCHW

Charles Schwab

88.50

16.26

22.51%

Goldman Sachs Group

625.11

187.82

42.95%

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

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.