Morgan Stanley (MS) AI Stock Analysis

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Morgan Stanley

(NYSE:MS)

Rating:76Outperform

Price Target:

$164.00

▲(4.87% Upside)

Morgan Stanley's strong financial performance, positive technical indicators, and favorable earnings call sentiment contribute to a robust stock score. While cash flow challenges and high leverage present risks, the company's strategic focus and market momentum support a positive outlook.

Positive Factors

Strong Wealth Management Profits

Morgan Stanley's Wealth Management segment shows robust profitability and high margins, indicating a strong competitive position and effective client engagement, which supports long-term revenue stability.

Record Client Assets

The growth in client assets reflects Morgan Stanley's successful asset management strategies and client trust, providing a solid foundation for future revenue and market share expansion.

Positive Investment Management Flows

Sustained positive inflows into investment management indicate strong product offerings and client confidence, which are crucial for continued growth and competitive advantage in asset management.

Negative Factors

High Leverage

Morgan Stanley's high leverage could pose risks by limiting financial flexibility and increasing vulnerability to economic downturns, necessitating careful management to maintain stability.

Cash Flow Challenges

Persistent cash flow challenges highlight difficulties in converting profits into cash, which could impact Morgan Stanley's ability to invest in growth opportunities and manage debt effectively.

Slowdown in Investment Banking

A slowdown in investment banking activities can affect Morgan Stanley's revenue diversification and growth potential, especially if market conditions remain volatile or uncertain.

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

Market Cap

$249.65B

Dividend Yield2.41%

Average Volume (3M)4.67M

Price to Earnings (P/E)17.7

Beta (1Y)1.45

Revenue Growth6.36%

EPS Growth45.50%

CountryUS

Employees81,000

SectorFinancial

Sector Strength73

IndustryFinancial - Capital Markets

Share Statistics

EPS (TTM)2.13

Shares Outstanding1,596,335,800

10 Day Avg. Volume5,013,203

30 Day Avg. Volume4,667,297

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 Cap2.68

Enterprise Value/Revenue6.16

Enterprise Value/Gross Profit10.96

Enterprise Value/Ebitda27.41

Forecast

1Y Price Target

$148.09

Price Target Upside-5.31% Downside

Rating ConsensusModerate Buy

Number of Analyst Covering13

Morgan Stanley Business Overview & Revenue Model

Company DescriptionMorgan Stanley (MS) is a leading global financial services firm that provides a wide range of investment banking, securities, wealth management, and investment management services. Founded in 1935 and headquartered in New York City, the company operates through three primary segments: Institutional Securities, Wealth Management, and Investment Management. Morgan Stanley serves a diverse client base, including corporations, governments, and individuals, offering solutions that include capital raising, mergers and acquisitions advisory, asset management, and financial planning.

How the Company Makes MoneyMorgan Stanley generates revenue through several key streams. The Institutional Securities segment earns income from capital markets activities, such as underwriting and trading of equity and debt securities, as well as advisory fees from mergers and acquisitions. The Wealth Management segment generates revenue primarily through fees for advisory services, commissions from the sale of financial products, and interest income from client loans and deposits. The Investment Management segment derives income from management fees on assets under management and performance fees from specific investment products. Significant partnerships with institutional investors and strategic alliances in various markets also contribute to its earnings, along with a strong focus on diversification across sectors and geographies.

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 robust upward trajectory, recently surpassing $6 trillion. This growth aligns with the firm's strategic focus on Wealth and Investment Management, which achieved record profits and client assets of over $8.2 trillion. The earnings call highlighted strong fee-based flows and a positive outlook, despite challenges in investment banking and fixed income underwriting. The firm's commitment to deploying capital and increasing dividends underscores confidence in sustaining growth, even as regulatory reforms loom.

Data provided by:

Main Street Data

Morgan Stanley Earnings Call Summary

Earnings Call Date:Jul 16, 2025

(Q2-2025)

% Change Since: |

Next Earnings Date:Oct 15, 2025

Earnings Call Sentiment Positive

The earnings call highlighted Morgan Stanley's strong performance in wealth management and positive long-term inflows in investment management, while acknowledging challenges in investment banking and fixed income underwriting due to market volatility and macroeconomic uncertainty.

Q2-2025 Updates

Positive Updates

Record Client Assets

Total client assets across Wealth and Investment Management climbed to over $8.2 trillion, moving toward the target to exceed $10 trillion.

Strong Wealth Management Profits

Wealth Management profits before tax reached a record $2.2 billion with margins exceeding 28%.

Robust Equity Revenues

The equities markets business achieved a top line of $3.7 billion, driven by strong client engagement and market activity.

Positive Investment Management Flows

Investment Management generated positive long-term net inflows of $11 billion in the second quarter.

High Return on Tangible Equity

Morgan Stanley reported an 18.2% return on tangible equity for the quarter.

Negative Updates

Slowdown in Investment Banking

Investment banking activity paused for part of the quarter, leading to a year-over-year decline in debt underwriting and advisory revenues.

Decline in Fixed Income Underwriting Revenues

Fixed income underwriting revenues fell to $532 million due to lower noninvestment grade issuance compared to the previous year.

Macroeconomic Uncertainty

The market faced volatility and uncertainty, particularly in the first half of the quarter, impacting investor sentiment and prompting portfolio repositioning.

Company Guidance

During Morgan Stanley's second quarter 2025 earnings call, the firm reported strong financial performance with $16.8 billion in revenue, $2.13 earnings per share (EPS), and an 18.2% return on tangible common equity (ROTCE). Total client assets across Wealth and Investment Management grew to $8.2 trillion, with a target to exceed $10 trillion. The Wealth Management division posted a record profit before tax of $2.2 billion on margins exceeding 28%, alongside strong net new assets of $59 billion and fee-based flows of $43 billion. Institutional Securities revenues were $7.6 billion, driven by the equities markets business generating $3.7 billion. Investment Banking revenues totaled $1.5 billion, with a notable rebound in equity underwriting. The firm’s CET1 ratio was 15%, providing flexibility for capital deployment, including a $1 per share dividend, stock buybacks, and strategic investments. Looking ahead, Morgan Stanley remains optimistic about market conditions and regulatory reforms, focusing on generating durable returns and leveraging its integrated business model for growth.

Morgan Stanley Financial Statement Overview

Summary

Morgan Stanley demonstrates strong profitability with a solid income statement, though cash flow challenges and high leverage require attention. The company shows efficient operations and steady revenue growth, but improvements in cash conversion are needed for long-term stability.

Income Statement

Positive

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

Positive

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

Positive

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	108.38B	103.14B	88.29B	62.48B	57.78B	45.83B
Gross Profit	60.98B	57.36B	50.13B	49.93B	56.41B	45.83B
EBITDA	24.38B	22.76B	16.07B	18.09B	23.88B	0.00
Net Income	14.76B	13.39B	9.09B	11.03B	15.03B	11.00B
Balance Sheet
Total Assets	1.35T	1.22T	1.19T	1.18T	1.19T	1.12T
Cash, Cash Equivalents and Short-Term Investments	216.00B	401.59B	461.89B	467.86B	500.35B	474.23B
Total Debt	436.99B	360.49B	339.04B	308.75B	305.36B	283.53B
Total Liabilities	1.24T	1.11T	1.09T	1.08T	1.08T	1.01T
Stockholders Equity	108.18B	104.51B	99.04B	100.14B	105.44B	101.78B
Cash Flow
Free Cash Flow	-20.94B	-2.10B	-36.95B	-9.47B	31.66B	-26.68B
Operating Cash Flow	-17.67B	1.36B	-33.54B	-6.40B	33.97B	-25.23B
Investing Cash Flow	-39.55B	-29.46B	-3.08B	-11.63B	-49.90B	-37.90B
Financing Cash Flow	73.02B	46.76B	-2.73B	22.71B	41.55B	83.78B

Morgan Stanley Technical Analysis

Technical Analysis Sentiment

Positive

Last Price156.39

Price Trends

50DMA

144.80

Positive

100DMA

135.76

Positive

200DMA

129.64

Positive

Market Momentum

MACD

2.99

Negative

RSI

72.08

Negative

STOCH

91.14

Negative

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 156.39 is above the 20-day moving average (MA) of 149.02, above the 50-day MA of 144.80, and above the 200-day MA of 129.64, indicating a bullish trend. The MACD of 2.99 indicates Negative momentum. The RSI at 72.08 is Negative, neither overbought nor oversold. The STOCH value of 91.14 is Negative, 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
IBKR	78 Outperform	$28.20B	33.22	19.15%	0.78%	12.30%	20.76%
GS	77 Outperform	$236.14B	17.19	12.78%	1.67%	3.53%	45.85%
MS	76 Outperform	$249.65B	17.72	14.13%	2.41%	6.36%	45.50%
RJF	75 Outperform	$33.95B	16.71	18.16%	1.15%	9.42%	14.86%
SCHW	68 Neutral	$169.80B	25.18	15.59%	1.13%	4.64%	54.26%
Sector *	68 Neutral	$18.02B	11.58	9.93%	3.75%	9.73%	1.23%
LPLA	65 Neutral	$28.05B	23.98	29.46%	0.34%	29.23%	13.45%

* Financial Sector Average

Performance Comparison

Morgan Stanley

156.39

59.20

60.91%

IBKR

Interactive Brokers

63.70

31.72

99.19%

LPLA

LPL Financial

350.64

143.24

69.06%

RJF

Raymond James Financial

170.27

52.18

44.19%

SCHW

Charles Schwab

93.54

30.66

48.76%

Goldman Sachs Group

780.06

304.60

64.06%

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: Aug 19, 2025