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5 Reasons to Add Morgan Stanley (MS) to Your Portfolio Now
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With the earnings season almost in the last phase, the Finance sector seems to be one of the best performers. So, we thought of bringing up a stock from the sector that reflects strong fundamentals and solid long-term growth opportunity.
Morgan Stanley (MS - Free Report) is one such stock that not only beat estimates this time, but also has been witnessing upward estimate revisions, reflecting analysts’ optimism about its growth prospects. Over the last 60 days, the Zacks Consensus Estimate for 2017 and 2018 increased 2.4% and 2.1%, respectively.
Further, shares of this Zacks Rank #2 (Buy) stock have gained 13.1% in the last six months, outperforming the 9.7% growth for the Zacks categorized Investment Brokers industry.
Notably, Morgan Stanley has a number of other aspects that make it an attractive investment option.
Revenue Strength: Morgan Stanley had been struggling to strengthen its revenues over the last few years. Nonetheless, by undertaking several initiatives to restructure its operations with a goal to lower balance-sheet risks and focus on two less capital intensive businesses, the company is witnessing a rise in top line. Notably, the company’s projected sales growth (F1/F0) of 8.1% as against no growth for the industry, reflects its strength.
Earnings Growth: Morgan Stanley witnessed earnings growth of 25.1% in the last three–five years. Further, the company’s long-term (three–five years) estimated EPS growth rate of 13.2% promises rewards for investors in the long run.
Effective Expense Management: Morgan Stanley’s cost-saving initiatives have started yielding results. Operating expenses declined in 2015 and 2016. Despite a rise in expenses in the first quarter, the company remains on track to achieve its expense savings target of $1 billion by 2017.
Efficient Capital Deployment: Morgan Stanley’s capital deployment activities are impressive. In Jun 2016, the company received conditional approval for its capital plan. Thereafter, in July, the company announced a 33% hike in quarterly dividend and authorized share repurchase of $3.5 billion. Given the strong balance sheet position, the company will continue enhancing shareholder value, going forward.
Valuation Looks Reasonable: Morgan Stanley has a Value Style Score of ‘B’. The Value Style Score condenses all valuation metrics into one actionable score that helps investors steer clear of ‘value traps’ and identify stocks that are truly trading at a discount. Our research shows that stocks with Style Scores of ‘A’ or ‘B’, when combined with Zacks Rank #1 (Strong Buy) or #2, offer the best upside potential.
Northern Trust has witnessed an upward earnings estimate revision of 2.4% for the current year, over the past 60 days. Also, over the last six months, its share price jumped 17.9%.
Stifel Financial earnings estimates were revised 1.6% upward for the current year, in the past 60 days. Also, its share price increased 17.2% over the last six months.
PNC Financial recorded an upward earnings estimate revision of 3.2% for the current year, in the past 60 days. Also, its share price has seen a 22.2% rise over the last six months.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Click here for Zacks' private trades >>
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5 Reasons to Add Morgan Stanley (MS) to Your Portfolio Now
With the earnings season almost in the last phase, the Finance sector seems to be one of the best performers. So, we thought of bringing up a stock from the sector that reflects strong fundamentals and solid long-term growth opportunity.
Morgan Stanley (MS - Free Report) is one such stock that not only beat estimates this time, but also has been witnessing upward estimate revisions, reflecting analysts’ optimism about its growth prospects. Over the last 60 days, the Zacks Consensus Estimate for 2017 and 2018 increased 2.4% and 2.1%, respectively.
Further, shares of this Zacks Rank #2 (Buy) stock have gained 13.1% in the last six months, outperforming the 9.7% growth for the Zacks categorized Investment Brokers industry.
Notably, Morgan Stanley has a number of other aspects that make it an attractive investment option.
Revenue Strength: Morgan Stanley had been struggling to strengthen its revenues over the last few years. Nonetheless, by undertaking several initiatives to restructure its operations with a goal to lower balance-sheet risks and focus on two less capital intensive businesses, the company is witnessing a rise in top line. Notably, the company’s projected sales growth (F1/F0) of 8.1% as against no growth for the industry, reflects its strength.
Earnings Growth: Morgan Stanley witnessed earnings growth of 25.1% in the last three–five years. Further, the company’s long-term (three–five years) estimated EPS growth rate of 13.2% promises rewards for investors in the long run.
Effective Expense Management: Morgan Stanley’s cost-saving initiatives have started yielding results. Operating expenses declined in 2015 and 2016. Despite a rise in expenses in the first quarter, the company remains on track to achieve its expense savings target of $1 billion by 2017.
Efficient Capital Deployment: Morgan Stanley’s capital deployment activities are impressive. In Jun 2016, the company received conditional approval for its capital plan. Thereafter, in July, the company announced a 33% hike in quarterly dividend and authorized share repurchase of $3.5 billion. Given the strong balance sheet position, the company will continue enhancing shareholder value, going forward.
Valuation Looks Reasonable: Morgan Stanley has a Value Style Score of ‘B’. The Value Style Score condenses all valuation metrics into one actionable score that helps investors steer clear of ‘value traps’ and identify stocks that are truly trading at a discount. Our research shows that stocks with Style Scores of ‘A’ or ‘B’, when combined with Zacks Rank #1 (Strong Buy) or #2, offer the best upside potential.
Other Stocks Worth Considering
Some other stocks worth considering in the finance sector include Northern Trust Corporation (NTRS - Free Report) , Stifel Financial Corp. (SF - Free Report) and The PNC Financial Services Group, Inc. (PNC - Free Report) . All three stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northern Trust has witnessed an upward earnings estimate revision of 2.4% for the current year, over the past 60 days. Also, over the last six months, its share price jumped 17.9%.
Stifel Financial earnings estimates were revised 1.6% upward for the current year, in the past 60 days. Also, its share price increased 17.2% over the last six months.
PNC Financial recorded an upward earnings estimate revision of 3.2% for the current year, in the past 60 days. Also, its share price has seen a 22.2% rise over the last six months.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Click here for Zacks' private trades >>