Morgan Stanley (MS) AI Stock Analysis

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Morgan Stanley

(NYSE:MS)

Select Model

Outperform 76 (OpenAI - 4o)

Rating:76Outperform

Price Target:

$192.00

▲(8.49% Upside)

Morgan Stanley's strong earnings call performance and positive technical indicators are significant strengths. However, high leverage and modest valuation metrics present risks. The firm's strategic focus on AI and digital innovations supports a positive outlook, but careful management of cash flow and debt levels is crucial.

Positive Factors

Strategic Investments in AI

Morgan Stanley's strategic investments in AI enhance productivity and client engagement, positioning the firm for sustained growth in a tech-driven future.

Wealth Management Growth

Strong growth in wealth management demonstrates effective client acquisition and retention, contributing to long-term revenue stability and market leadership.

Acquisition of EquityZen

Acquiring EquityZen expands Morgan Stanley's capabilities in private market transactions, enhancing its service offerings and competitive position in wealth management.

Negative Factors

High Leverage

High leverage indicates significant reliance on debt, which could pose risks to financial stability if market conditions deteriorate, affecting long-term resilience.

Negative Cash Flow Trends

Negative cash flow trends highlight potential liquidity issues, necessitating improved cash flow management to ensure long-term operational sustainability.

Regulatory Uncertainties

Regulatory uncertainties can affect capital deployment strategies, posing challenges to strategic planning and potentially impacting long-term growth prospects.

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

Market Cap

$281.28B

Dividend Yield2.18%

Average Volume (3M)5.51M

Price to Earnings (P/E)18.2

Beta (1Y)1.40

Revenue Growth7.22%

EPS Growth48.18%

CountryUS

Employees81,000

SectorFinancial

Sector Strength70

IndustryFinancial - Capital Markets

Share Statistics

EPS (TTM)2.80

Shares Outstanding1,589,309,300

10 Day Avg. Volume5,792,614

30 Day Avg. Volume5,512,576

Financial Highlights & Ratios

PEG Ratio0.28

Price to Book (P/B)1.91

Price to Sales (P/S)1.94

P/FCF Ratio-95.25

Enterprise Value/Market Cap2.10

Enterprise Value/Revenue5.27

Enterprise Value/Gross Profit9.26

Enterprise Value/Ebitda22.50

Forecast

1Y Price Target

$178.54

Price Target Upside0.88% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering14

EPS Forecast (FY)N/A

Revenue Forecast (FY)N/A

Morgan Stanley Business Overview & Revenue Model

Company DescriptionMorgan 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 MoneyMorgan Stanley generates revenue through multiple streams. The Institutional Securities segment earns income from investment banking activities, which include advisory services for mergers and acquisitions, underwriting of equity and debt securities, and capital raising services. This segment also profits from trading and sales of securities, commodities, and foreign exchange. The Wealth Management segment contributes significantly through fees earned from advisory services, asset management, and brokerage services provided to individual investors and institutions. Additionally, the Investment Management segment generates revenue from managing investment funds and private equity investments, earning management fees and performance-based fees. Strategic partnerships with other financial institutions and technology firms also enhance its service offerings and revenue potential, while market conditions and client demand play critical roles in its overall earnings.

Morgan Stanley Key Performance Indicators (KPIs)

Any

Net Income Breakdown

Net Income Breakdown
Provides a detailed view of profit sources, illustrating how different operations contribute to the bottom line and financial health.

Chart InsightsMorgan Stanley's Institutional Securities segment shows volatility but recent recovery, while Wealth Management consistently strengthens, achieving record pretax profits and margins. Investment Management is gaining momentum with a 12% revenue increase year-over-year, supported by strong asset inflows. Despite robust equity and fixed income performance, challenges persist in investment banking and fixed income underwriting. The firm's strategic focus on capital deployment and dividend increases signals confidence, yet macroeconomic uncertainties and regulatory reforms could impact future performance.

Data provided by:

The Fly

Morgan Stanley Earnings Call Summary

Earnings Call Date:Oct 15, 2025

(Q3-2025)

% Change Since: |

Next Earnings Date:Jan 15, 2026

Earnings Call Sentiment Positive

Morgan Stanley's earnings call reveals a strong performance with record revenues and client asset growth. The firm is capitalizing on a favorable investment banking environment and expanding its wealth management and AI capabilities. However, regulatory uncertainties and geopolitical risks present challenges. Overall, the positive aspects of growth and strategic advancements outweigh the concerns.

Q3-2025 Updates

Positive Updates

Record Revenue and Client Assets

Morgan Stanley reported record revenues of $18.2 billion and total client assets reaching $8.9 trillion, showing robust growth and client engagement.

Strong EPS and Return on Tangible Equity

The firm reported an EPS of $2.80 and a return on tangible common equity (ROTCE) of 23.5%, reflecting strong profitability.

Investment Banking Recovery

Investment banking revenues increased to $2.1 billion, with equity underwriting revenues up 80% year-over-year, driven by IPO activity and strong advisory results.

Wealth Management Growth

Wealth Management reached a record $7 trillion in client assets, with $81 billion in net new assets and $42 billion in fee-based flows, demonstrating strong client acquisition and retention.

Expansion in AI and Digital Innovations

The firm is investing in AI initiatives like DevGen AI and LeadIQ, enhancing productivity and client engagement across its platforms.

Parametric Solutions and Global Reach

Investment Management continues to expand with Parametric Solutions, achieving $1.8 trillion in AUM and significant inflows from third-party partnerships.

Negative Updates

Regulatory Uncertainties

Continued uncertainty around regulatory frameworks, especially regarding SLR and Basel impacts, which affects capital deployment strategies.

Geopolitical and Economic Uncertainty

Market conditions remain uncertain due to geopolitical tensions and macroeconomic factors, which could impact future performance.

Company Guidance

During Morgan Stanley's Third Quarter 2025 earnings call, the firm reported record financial performance with revenues of $18.2 billion and earnings per share (EPS) of $2.80, alongside a return on tangible common equity (ROTCE) of 23.5%. Total client assets increased by $1.3 trillion over the past year, reaching $8.9 trillion, with the wealth management segment contributing $7 trillion and achieving a 30% margin. The investment banking sector saw revenues rise by 50%, driven by strong equity and fixed income underwriting results, supported by a favorable capital markets environment. The firm's institutional securities business delivered $8.5 billion in revenues, with significant contributions from equities and fixed income. Morgan Stanley also highlighted strategic investments in areas like AI and digital assets, positioning the firm for continued growth and earnings durability. The firm's capital strength was underscored by a CET1 ratio of 15.2% and excess capital of over 300 basis points. Looking forward, Morgan Stanley aims to exceed $10 trillion in total client assets while maintaining its focus on strategic capital allocation and shareholder returns.

Morgan Stanley Financial Statement Overview

Summary

Morgan Stanley shows strong profitability with robust revenue growth and efficient operations. However, high leverage and negative cash flow trends present potential risks, necessitating improved cash flow management.

Income Statement

Very Positive

Morgan Stanley's income statement shows strong revenue growth with a 3.43% increase in TTM, supported by a healthy gross profit margin of 57.35% and a net profit margin of 14.29%. The EBIT and EBITDA margins are robust at 18.63% and 22.00%, respectively, indicating efficient operational management. However, the revenue growth rate has slowed compared to previous years, which could be a concern if the trend continues.

Balance Sheet

Positive

The balance sheet reflects a high debt-to-equity ratio of 3.92, which is typical for the financial industry but indicates significant leverage. The return on equity is strong at 15.07%, showcasing effective use of equity to generate profits. The equity ratio is relatively low, suggesting a heavy reliance on debt financing, which could pose risks if market conditions change.

Cash Flow

Neutral

Cash flow analysis reveals challenges, with negative operating and free cash flows in the TTM period. The free cash flow to net income ratio is positive at 1.14, indicating some ability to cover net income with free cash flow. However, the negative growth in free cash flow and operating cash flow coverage ratio of 0.0 highlight potential liquidity issues that need addressing.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	112.10B	103.14B	88.29B	62.48B	57.78B	49.68B
Gross Profit	63.80B	57.36B	50.13B	49.93B	56.41B	45.07B
EBITDA	26.27B	22.76B	16.07B	18.09B	23.88B	18.19B
Net Income	16.18B	13.39B	9.09B	11.03B	15.03B	11.00B
Balance Sheet
Total Assets	1.36T	1.22T	1.19T	1.18T	1.19T	1.12T
Cash, Cash Equivalents and Short-Term Investments	103.05B	401.59B	461.89B	467.86B	500.35B	474.23B
Total Debt	414.62B	360.49B	339.04B	308.75B	305.36B	283.53B
Total Liabilities	1.25T	1.11T	1.09T	1.08T	1.08T	1.01T
Stockholders Equity	109.96B	104.51B	99.04B	100.14B	105.44B	101.78B
Cash Flow
Free Cash Flow	-6.75B	-2.10B	-36.95B	-9.47B	31.66B	-26.68B
Operating Cash Flow	-3.68B	1.36B	-33.54B	-6.40B	33.97B	-25.23B
Investing Cash Flow	-43.53B	-29.46B	-3.08B	-11.63B	-49.90B	-37.90B
Financing Cash Flow	59.04B	46.76B	-2.73B	22.71B	41.55B	83.78B

Morgan Stanley Technical Analysis

Technical Analysis Sentiment

Positive

Last Price176.98

Price Trends

50DMA

166.12

Positive

100DMA

158.20

Positive

200DMA

141.14

Positive

Market Momentum

MACD

3.35

Positive

RSI

60.84

Neutral

STOCH

19.12

Positive

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 176.98 is above the 20-day moving average (MA) of 172.99, above the 50-day MA of 166.12, and above the 200-day MA of 141.14, indicating a bullish trend. The MACD of 3.35 indicates Positive momentum. The RSI at 60.84 is Neutral, neither overbought nor oversold. The STOCH value of 19.12 is Positive, 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 (68)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MS	76 Outperform	$281.28B	18.17	15.15%	2.18%	7.22%	48.18%
SCHW	74 Outperform	$175.60B	23.18	17.05%	1.11%	5.90%	66.60%
GS	73 Outperform	$267.98B	18.15	13.57%	1.57%	2.31%	44.49%
BAC	72 Outperform	$403.61B	15.06	9.87%	1.95%	0.15%	33.84%
JPM	72 Outperform	$863.53B	15.71	16.35%	1.79%	1.89%	12.32%
C	68 Neutral	$205.52B	16.15	6.88%	2.02%	-0.62%	105.57%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

* Financial Sector Average

Performance Comparison

Morgan Stanley

176.98

56.90

47.39%

BAC

Bank of America

55.27

12.10

28.03%

Citigroup

114.86

47.54

70.62%

JPM

JPMorgan Chase

317.21

84.54

36.33%

SCHW

Charles Schwab

98.82

25.41

34.61%

Goldman Sachs Group

893.48

338.70

61.05%

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.Date of analysis: Nov 13, 2025