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Morgan Stanley (MS) Falls More Steeply Than Broader Market: What Investors Need to Know

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Morgan Stanley (MS - Free Report) closed the most recent trading day at $77.81, moving -1.38% from the previous trading session. The stock's performance was behind the S&P 500's daily loss of 0.63%. Meanwhile, the Dow experienced a drop of 0.51%, and the technology-dominated Nasdaq saw a decrease of 0.63%.

Heading into today, shares of the investment bank had lost 9.57% over the past month, lagging the Finance sector's loss of 2.46% and the S&P 500's loss of 2.35% in that time.

The investment community will be paying close attention to the earnings performance of Morgan Stanley in its upcoming release. The company is slated to reveal its earnings on October 18, 2023. It is anticipated that the company will report an EPS of $1.28, marking a 16.34% fall compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $13.11 billion, indicating a 0.97% increase compared to the same quarter of the previous year.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $5.61 per share and a revenue of $54.27 billion, indicating changes of -11.79% and +1.12%, respectively, from the former year.

Investors should also note any recent changes to analyst estimates for Morgan Stanley. These revisions help to show the ever-changing nature of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 3.8% lower. Morgan Stanley is holding a Zacks Rank of #5 (Strong Sell) right now.

In terms of valuation, Morgan Stanley is currently trading at a Forward P/E ratio of 14.06. This denotes a discount relative to the industry's average Forward P/E of 16.25.

One should further note that MS currently holds a PEG ratio of 2.31. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Financial - Investment Bank industry currently had an average PEG ratio of 1.3 as of yesterday's close.

The Financial - Investment Bank industry is part of the Finance sector. This industry, currently bearing a Zacks Industry Rank of 217, finds itself in the bottom 14% echelons of all 250+ industries.

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

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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