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Is Morgan Stanley (MS) Stock Undervalued Right Now?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company to watch right now is Morgan Stanley (MS - Free Report) . MS is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 13.35 right now. For comparison, its industry sports an average P/E of 14.32. Over the past 52 weeks, MS's Forward P/E has been as high as 14.58 and as low as 11.69, with a median of 13.38.

Investors should also recognize that MS has a P/B ratio of 1.78. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.73. MS's P/B has been as high as 1.92 and as low as 1.30, with a median of 1.69, over the past year.

Finally, investors will want to recognize that MS has a P/CF ratio of 9.36. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 18.14. MS's P/CF has been as high as 10.82 and as low as 8.15, with a median of 9.45, all within the past year.

These are only a few of the key metrics included in Morgan Stanley's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, MS looks like an impressive value stock at the moment.


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