Back to top

Image: Bigstock

Morgan Stanley (MS) Gains But Lags Market: What You Should Know

Read MoreHide Full Article

Morgan Stanley (MS - Free Report) closed the most recent trading day at $80.38, moving +1.73% from the previous trading session. This change lagged the S&P 500's 2.59% gain on the day. Elsewhere, the Dow gained 2.66%, while the tech-heavy Nasdaq added 0.07%.

Heading into today, shares of the investment bank had lost 8.55% over the past month, outpacing the Finance sector's loss of 9.14% and the S&P 500's loss of 9.22% in that time.

Morgan Stanley will be looking to display strength as it nears its next earnings release, which is expected to be October 14, 2022. On that day, Morgan Stanley is projected to report earnings of $1.54 per share, which would represent a year-over-year decline of 24.51%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $13.3 billion, down 9.82% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $6.69 per share and revenue of $54.4 billion, which would represent changes of -18.61% and -8.97%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Morgan Stanley. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Morgan Stanley is currently sporting a Zacks Rank of #2 (Buy).

Looking at its valuation, Morgan Stanley is holding a Forward P/E ratio of 11.81. For comparison, its industry has an average Forward P/E of 12.34, which means Morgan Stanley is trading at a discount to the group.

It is also worth noting that MS currently has a PEG ratio of 1.48. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Financial - Investment Bank was holding an average PEG ratio of 0.9 at yesterday's closing price.

The Financial - Investment Bank industry is part of the Finance sector. This group has a Zacks Industry Rank of 176, putting it in the bottom 31% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize to follow all of these stock-moving metrics, and more, in the coming trading sessions.

See More Zacks Research for These Tickers

Normally $25 each - click below to receive one report FREE:

Morgan Stanley (MS) - free report >>

Published in