Morgan Stanley (MS) AI Stock Analysis

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Morgan Stanley

(NYSE:MS)

Select Model

Outperform 74 (OpenAI - 4o)

Rating:74Outperform

Price Target:

$174.00

▲(6.47% Upside)

Morgan Stanley's strong earnings call performance and strategic focus on growth areas like AI and digital assets are significant positives. However, high leverage and cash flow challenges present risks. The stock's fair valuation and stable technical indicators suggest a balanced outlook with opportunities for growth.

Positive Factors

Revenue Growth

Record revenues indicate strong business performance and market demand, supporting long-term growth prospects.

Wealth Management Expansion

Significant growth in wealth management assets demonstrates robust client acquisition and retention, enhancing revenue stability.

Strategic Investments in AI

Investing in AI enhances operational efficiency and client engagement, positioning the firm for future technological advancements.

Negative Factors

High Leverage

High leverage can increase financial risk, potentially limiting the company's ability to invest in growth opportunities.

Negative Free Cash Flow

Negative cash flow indicates challenges in cash generation, which may impact the company's ability to fund operations and growth.

Regulatory Uncertainties

Regulatory uncertainties can hinder strategic planning and capital allocation, impacting long-term business operations.

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

Market Cap

$260.66B

Dividend Yield2.36%

Average Volume (3M)5.64M

Price to Earnings (P/E)16.8

Beta (1Y)1.43

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. Volume4,800,687

30 Day Avg. Volume5,637,928

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 Cap2.64

Enterprise Value/Revenue6.08

Enterprise Value/Gross Profit10.60

Enterprise Value/Ebitda27.64

Forecast

1Y Price Target

$173.27

Price Target Upside6.03% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering12

EPS Forecast (FY)N/A

Revenue Forecast (FY)N/A

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

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:

Main Street Data

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 demonstrates strong profitability with a Gross Profit Margin of 56.3% and a Net Profit Margin of 13.5%. However, high leverage with a Debt-to-Equity Ratio of 3.71 and negative Free Cash Flow of -$30.3 billion indicate financial risks. The company needs to improve cash conversion to enhance its financial standing.

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	113.25B	103.14B	88.29B	62.48B	57.78B	45.83B
Gross Profit	64.94B	57.36B	50.13B	49.93B	56.41B	45.83B
EBITDA	24.92B	22.76B	16.07B	18.09B	23.88B	0.00
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	692.21B	401.59B	461.89B	467.86B	500.35B	474.23B
Total Debt	430.57B	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	-18.13B	-2.10B	-36.95B	-9.47B	31.66B	-26.68B
Operating Cash Flow	-15.97B	1.36B	-33.54B	-6.40B	33.97B	-25.23B
Investing Cash Flow	-66.04B	-29.46B	-3.08B	-11.63B	-49.90B	-37.90B
Financing Cash Flow	93.70B	46.76B	-2.73B	22.71B	41.55B	83.78B

Morgan Stanley Technical Analysis

Technical Analysis Sentiment

Positive

Last Price163.42

Price Trends

50DMA

157.04

Positive

100DMA

148.83

Positive

200DMA

135.45

Positive

Market Momentum

MACD

2.39

Negative

RSI

57.65

Neutral

STOCH

59.19

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 163.42 is above the 20-day moving average (MA) of 160.62, above the 50-day MA of 157.04, and above the 200-day MA of 135.45, indicating a bullish trend. The MACD of 2.39 indicates Negative momentum. The RSI at 57.65 is Neutral, neither overbought nor oversold. The STOCH value of 59.19 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 (68)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IBKR	80 Outperform	$31.47B	34.04	19.82%	0.41%	11.88%	28.96%
RJF	78 Outperform	$31.53B	15.36	17.72%	1.24%	6.55%	5.90%
MS	74 Outperform	$260.66B	16.83	15.15%	2.36%	7.22%	48.18%
GS	71 Outperform	$237.19B	16.06	13.57%	1.65%	2.31%	44.49%
SCHW	70 Outperform	$170.05B	21.96	17.04%	1.12%	5.90%	66.60%
LPLA	70 Outperform	$29.98B	34.47	21.32%	0.32%	35.19%	-18.62%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

* Financial Sector Average

Performance Comparison

Morgan Stanley

163.42

37.42

29.70%

IBKR

Interactive Brokers

69.86

27.65

65.51%

LPLA

LPL Financial

372.67

61.52

19.77%

RJF

Raymond James Financial

160.83

4.15

2.65%

SCHW

Charles Schwab

94.20

20.99

28.67%

Goldman Sachs Group

787.58

210.10

36.38%

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: Oct 15, 2025